634
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The dye trade has constituted a virtual, and exceedingly profitable, monopoly for the German firms; British competition would reduce profits and would do more to restrict German credit than almost any other step which could be taken at the present moment. The China market is undoubtedly one of the most important from the point of view of the distribution of dyes, with far-reaching effects upon general trade conditions. It is hoped that every effort will be made to place at least some supplies of British dyes on this market before the conclusion of the war,
10. Any special disabilities under which British trade suffers in competing with that of other nations, together with suggestions as to how such disabilities might be removed.
With the exception of the China Association, which tabulates in detail the various disabilities and suggested remedies, the remaining replies are very scanty. Thus, Canton has virtually no suggestion to make. Hankow and Tientsin suggest that a Consular Official with commercial training should be stationed at each of those ports. The subjoined extract from the Hankow report expresses their view :--
His time should be wholly devoted to trade interests, and he should be in close touch with all British firms who would have the right to approach him on all matters affecting individual or collective British interests. The many calls on the Consul and his staff in the discharge of their general functions preclude them from giving that undivided attention which is so important; and, further, the many changes in the staff takes away the con- tinuity which is so essential to success. Special appointinents are made by the German Government in this connection, and an official well versed in the requirements of his nationals and with a knowledge of things commercial is attached to consulates at the larger ports, and this system my Committee advocates for this district.
The Shanghai Chamber states:--
The chief point which has been commented upon by members of the Chamber is the need for the reconstitution of the Consular Service on modern lines, a question which has recently been discussed in detail and brought to the notice of His Majesty's Government in a joint report by the Chamber and the China Association.
The main disabilities, however, are those which are susceptible to purely commercial remedies the production of cheaper goods for a market where industrial aspirations and improved standards of living are progressing side by side with small capital and low wages. The insurance interests foresce a period in which German companies will be forced by pressure of competition to secede from tariff agreements, and they urge the necessity for closer co-operation among British companies for the reduction of rebates and a more businesslike handling of China risks, especially in regard to fire insurance. The China Association summarise the disabilities suffered by British trade in competition with its rivals as follows:-
(a) German trade with China is confined to Germans, while British trade is open
to Germans.
(b) British agencies are granted to Germans.
(c) Abuse by Germans of financial facilities enabling them to undermine British
firms by giving extended credit.
(d) Germans recoup losses by illegitimate methods, such as excessive claims ou the Chinese Government for commercial losses incurred during times of internal disturbance, such as the Boxer rising, the recent revolutions, &c., &c.
(c) The German monopoly of trade in aniline dyes.
The German monopoly of trade in arms and war supplies.
The preferential terms enjoyed by Germans in the way of a differential system of low railway and canal rates in Germany, and secret rebates of freight on shipments by German steamers, which together are the equivalent of a subsidy.
() More stringent regulations affecting British shipping than are enforced in
the case of other nationalities.
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() The preferential terms enjoyed by Japan in respect of the lower scale of duty imposed on merchandise imported overland from Korea by way of Antung.
(2) Foreign ships are freely admitted to trade between British ports, but practically
no other nation gives reciprocal privileges to British ships.
The remedies suggested by the Association in order to counteract these dis- advantages are as follows:-
(a) (b) (c) British companies, firms, and individuals trading with and in China might combine under a simple formula or obligation, such, for example, as a formal expression of concern to promote British interests and an intention of giving preference to British goods, enterprises, and services when such preference does not entail loss.
A body so constituted might be given such special official recognition as would give its members a distinct status, much on the lines of the white lists now in vogue. The foundation for such a body already exists in the China Association.
The problem is to create a reliably British body, membership of which would carry a recognised and special status, by reason of official imprimatur, and to effect this without depriving any possible non-conformist of elementary rights.
The existence of such a body should automatically weed out firms of ambiguous nationality. Considerable moral pressure could be brought to bear upon British concerns not to place their agencies in China with non-British firms. The Board of Trade might advise manufacturers not to go outside the organisation.
A necessary preliminary to a closer organisation by our merchants in China and their more vigorous support by H.M. Government, may probably be found to be the compulsory registration of firms and their partners in any Consulate in the area of which the firm does business. The Germans have in China a very complete system of such registration, including not only partners but persons authorised to sign per pro. The Japanese have copied the German system, and apply it rigorously. No one can trade unless so registered. If we are to have a post-bellum economic war, our diplomatic and consular officers should know, it seems, not only the objects at which they are to aim, but the persons on whose behalf they are to tight.
(d) Great Britain in concert with her Allies might give diplomatic support
to China in opposition to illegitimate claims by Germany.
(e) Such direct Government support of aniline dye industries in this country as would lead to a large expansion of production, capable of supplying British requirements and of leaving a considerable surplus for exportation. It would appear to be imperative that the Government assistance given to the recently-formed British Dyes Company should be widened in its scope.
German competition after the war will be extremely severe; therefore, special assistance and protection against very powerful opponents is essential to safeguard this British industry, now in its infancy, from being overwhelmed. (f) Unless the great bulk of the valuable plant recently erected in this country for the production of arms and ammunition is to be scrapped after the war, it would seem to be essential that some employment for it should be obtained from supplying other countries. Government should give all the assistance in their power to the representatives of our great munition concerns to meet German competition in foreign countries. These concerns should be urged to prosecute business in China through British channels, with expert assistance.
(g) Preferential rebates by German shipping companies to their nationals might be met by differential port charges levied at British ports against the vessels of those companies. Actual proof of rebates will be difficult to obtain, but possibly representations made by a responsible body like the Association indicated above might be sufficient evidence to justify retaliatory measures.
(h) Regulations affecting British steamers employed in the East should not be imposed without due regard being given to the special conditions and requirements of the trade. In this connection special attention may be drawn to the regulations in respect of the Convention for the Safety of Life at Sea signed in London on 20th January 1914. These regulations were made
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