138
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XXIII-British Employees under the Chinese Government.
A list of British interests in China would not be complete without mention of the large number of British subjects employed by the Chinese Government as expert advisers or as assistants in administrative work. I do not know of any complete list of such foreign employees. But in the Chinese Maritime Customs alone. 1.148 foreigners, representing seventeen nationalities, are employed; and of these a little more than 50 per cent. are British. The Inspector-General, Sir Francis Aglen, is a British subject. in accordance with the Chinese Declaration of the 13th February, 1998 that the Inspector-General of the Maritime Customs should be a British subject so long as British trade predominates in China. It may be observed en passant that the Japanese statesman, Viscount Kato, in his confidential talk with Mr. Alsten in June 1919, touched upon this subject and remarked that "the increase in Japanese trade might soon enable his country to claim priority."
Sir Reginald Gamble. Foreign Associate Chief Inspector in the Salt Adminis- tration, is also a British subject, and so is a large proportion of his foreign staff of about forty persons.
Competition in China.
F. ASHTON-GWATKIN.
PART II-Our Competitors.
Our principal competition in the past has been with Germany, since Germany traded largely in the same lines as we did. German competition has for the time being leen entirely swept away, and it is evident that it will not recover for many years. French trade is chiefly concerned with silk, and Russian trade with tea; British werchants have comparatively little share in these two businesses. It is clear that our principal competitors in the future will be Japan and the United States of America. These two countries have geographical advantages with which we cannot compete; moreover, they each take a very large share of China's export trade United States of America in silk (which is China's most valuable export), hides and egg products, and Japan in beans, beancake and bean oil (the second most valuable export), raw cotton, iron ore and pig-iron, flour, wheat, wool, fibres, ground-nuts, sesamum seed. This development of the export trade has naturally assisted in increasing the volume of imports. But the Japanese are handicapped by the hatred with which they have inspired the Chinese, and by the poor quality of their goods; and the Americans by their inexperience of the China market, and by the absence of a mature development of banking and shipping facilities.
United States of America.
We must recognise, however, that both of our most dangerous competitors lay great stress on the national spirit in trade, and both are actively engaged in extending their commercial interests in China. In Shanghai alone 100 new American firms, amongst which are included several banks and shipping companies. started business in 1919 (see Appendices VII and VIII). Especially in the supply of iron and steel, in machinery and, to a certain extent, in cotton fabrics, American competition has been keenly felt. For instance, the supply of motor cars to the Far East has become practically an American monopoly. The Jones Act, which has just become law in America, appears to aim largely at a monopolisation of American trade in the Pacific for American ships. It is a manifest threat to Japanese and British tonnage transporting goods from China to the United States; and seeing that the American mercantile marine has increased from 2,027,000 tons before the war to 16,350,000 tons in July, 1920, it is clear that the threat is not an idle one, An independent interest in railway finance and construction in China commenced in 1916 with the Siems-Carey concessions, although as members of the first consortium the Americans were already concerned in a share of the Hukuang lines. The Standard Oil Company has tanks and factories in China: and the Singer Sewing Machine Company agencies throughout the country. The General Electric Company has a share in an electric bulb factory at Shanghai (China Lamp Company, Japan-American), and the Western Electric Company a share in a telephone factory in the same city (China Electric Company, Sino-Japanese American). Americans have three albumen factories at Shanghai, and a refrigeratory at Tsingtao. At Tien-tsin a Sino-American flour-milling company has begun operations with a mill, which is to be the first of a comprehensive system
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of mills to be erected by the same company at various centres in North China. The company will later engage in the pressing of bean-oil and the making of macaroni; another American concern at Tien-tsin has begun work on a new cold-storage, meat- packing and egg-albumen plant. An American syndicate is prospecting for metals in Yunnan. Finally, the lead taken by America in the formation of the new loan consortium, and the fact that the American market alone is at present in a position to find the ready capital which China's development so badly needs, will greatly enhance America's prestige in China and assist her commercial and industrial expansion. America is also greatly assisted by her large share in missionary and educational work in China (see Appendix XIV), by the return of half her Boxer indemnity, and by the fact that she has never joined in the scramble for concessions or territories. Chinese regard America as their one disinterested friend.
Japan.
Japanese competition is more to be feared than American, because their Government recognises that they must keep the Chinese market or cease to exist as a great commercial country." Japanese commercial expansion in China has been fostered by every possible means, by Government undertakings like the South Manchurian Railway, by subsidies to shipping, industrial and other concerns, by diplomatic pressure exerted à outrance, as in the case of the Twenty-One Demands, and by a series of purely political, non-economic loans which can only be described as the systematic purchase of the leading politicians in China. Japanese financial control of China has considerably strengthened since the days before the war, when Japan had to rely on the support of the London market for funds to promote her policies abroad. Now it is Japan and America who will carry the British and French share in forthcoming consortium loans. During 1917-18 it is estimated that Japan invested between £20,000,000 and £30,000,000 of her war profits in financing (and corrupting) China. As securities for these loans the Chinese have pledged railway revenues, salt revenues, native customs revenue, iron, tin, and antimony mines. forests, bank stock (e.g., bank of communications), shares in the Lanchow Coal Company (which is part of the Kailan Mining Administration), It has telegraph property, wireless telegraph property, provincial revenues, &c. been said that, since 1917, the corrupt Government of China has pawned to the Japanese every national asset on which it could lay hands. The principal Japanese bank for financing the China trade and for making loans to the China authorities has been the Yokohama Specie Bank. But during the great loan period 1917-18. it was the Bank of Chosen (Korea), in conjunction with the Industrial Bank and the Bank of Taiwan (Formosa), which found the funds (see Appendices VIII and IX).
Japan: Trade.
Helped by many advantages, natural and artificial, the percentage of Japan's share in the China trade shows a remarkable upward curve :—
l'ercentage
1896,
1903. 1913. 1914.
1915. 1910. 1917. 1018.
1919.
8.4 14.7
19-7 21-1
23.1
28-3 39-4 40.9 87.1
Japanese shipping in the Chinese carrying-trade shows the following increase in percentage of the total tonnage:—
Percentage
1903.
1913.
1914.
1915.
1916.
1917.
1918.
1919.
12.2
25.1
21-5
26.3
27-5
28.2
31-2
28.4
In 1919 the whole of the iron ore exported from China went to Japan, and mest of the output of pig-iron. The only important iron and steel works in China, the Hanyang works and those near Dairen in South Manchuria, are under Japanese control. There has been little export of coal from China as yet; but, of a total production of 13,000,000 tons produced by modern methods, the Manchurian mines
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