12
13
An ironworks is projected at Chin-Ling-Chen, 180 miles from Tsingtao; and coal mines have been acquired at various points in Shantung. Japanese undertakings (two glass factories and an albumen factory) have been started at Tsinan, the capital of Shantung.
It is not difficult to foresee in these activities the formation in Shantung of a second Japanese enclave like South Manchuria.
Elsewhere than in these protected spheres Japanese industrial enterprise is less to the fore. However, in Shanghai the Japanese have obtained control of at least five cotton mills, one flour mill and one paper mill. At Hankow they have, through loans and through the 1915 treaty with China, acquired a preponderant interest in the great undertakings of the Ilanyehping Company, which is the over- shadowing industrial concern of Hankow (see Appendix I). At Tientsin they have a cigarette factory, an oil mill, a flour mill and an ironworks.
Japan: Population. Special Rights, &c.
It may be added that the Japanese population in China is given in the 1920 returns as 158,918; of these about 75,000 are in South Manchuria and about 65,000 in the Kwantung Peninsula. The Japanese population of Shantung is over 25,000. of whom about 20,000 are in Tsingtao itself. There are over 10,000 Japanese
*
in Shanghai. The Japanese have thirty-two consulates in China and fifty-three post offices. They own residential concessions at Hankow. Tientsin and Amoy, and settlements at Chungking, Hangchew and Soochow. They maintain a large force of railway guards along the Southern Manchurian Railway and in Shantung, and garrison of about 1.000 men in Hankow. By the treaty of 1915 they acquired exclusive rights for residence in South Manchuria, and for industrial and agricul- tural undertakings in Eastern Inner Mongolia, with extra-territorial privileges.
Japan: Formosa and Fukien,
Finally, the great and rich island of Formosa should not be lost sight of, which Japan took from China as a result of the war of 1894. It has an area of 13,839 square miles, a population of 3,600,000, and an import and export trade (1919) of £29,050,000 with Japan itself and £12.594,000 with foreign countries. It is particularly rich in sugar, tea, rice, camphor, coal and other minerals; petroleum exists. After the acquisition of Formosa, the attention of Japan was first attracted towards expansion in China, and her first attempt to carve out a sphere of influence was in the direction of Fukien. In 1898 China gave Japan an assurance of non- alienation of this province. But after the Russo-Japanese development in Korea and Manchuria began. The Fukien sphere has been left in war Japanese abeyance, but it has by no means been forgotten.
Japanese and British in the Yangtze Valley.
Japanese competition has established itself practically to the exclusion of all other in the spheres of South Manchuria and Shantung, where Japanese interests are paramount. In the Yangtsze valley it meets the competition of other nations on equal terms. For a full and interesting investigation of the question Sir J. Jordan's despatch No. 234 of the 20th May, 1919, should be consulted. earlier despatch on the same subject, he says:—
Referring to an
I.
My general view was that, though the Japanese had undoubtedly made great progress in many respects, yet Great Britain held her own. my opinion in the year in which war broke out.
Such was reason, after four years of war, to deviate. Those four years have been years From that opinion I see no of unexampled opportunity for Japan, and she has sought to make the most of them. But Great Britain still leads the van, and our prestige stands, or until the last few days stood (ie., in view of the Shantung decision), second to none. It is from unfair Japanese business methods that British trade has to fear rather than from genuine commercial competition. In one field British products reign supreme: namely, machinery.* companies still have a substantial lead, but the methods of the Japanese lines As regards shipping, the British are leading to steady progress, which we cannot begrudge them. As regards
In view of later reports, this is rather optimistic. Speaking in 1920, Mr. 11. II. Fox, His Majesty's Commercial Counsellor, stared that in machinery Japan and America were now getting nearly five times as much trade as Britain, the figures of 1919 (whole of China) boing: Great Britain, £642,840; United States of America, £1,182,667; Japan, £1,758,24]. In electrical material and fittings British exports to China lay even further behind.
the hold which Japan has secured upon the iron deposits of the Yangtsze valley. this is but natural, for to Japan the supply of iron is a national necessity. whereas to Great Britain it is of secondary importance
The Japanese have no interest in railways in the Yangtsze valley other than the insignificant and extremely inefficient Kiukiang-Nanchang line
I feel satisfied in asserting that, so far as the Yangtsze valley is concerned, and in so far as the recent decision at Paris justifies the use of the term 'prestige' at all, when applied to any Allied Power in China but Japan, at the moment at which I write British prestige has held its own during the war and our interests have been well maintained in spite of the obvious disadvantages to which they have been subjected."
Sir J. Jordan encloses in his despatch a statement by His Majesty's consul- general at Hankow. Mr. Wilton says:--
LL
To sum up the general prospects of British and Japanese trade in China to-day, the British may be said to possess all the advantages of a greater commercial and industrial experience. Given equal opportunities, they are much better able to set in motion large commercial organisations or industrial undertakings than the Japanese. On the other hand, they are handicapped by the fact that China occupies a much smaller place in the vision of Great Britain than of Japan. The latter. too, has more reasons than the former for building up and expanding her share in the trade of China. The question of the financing of British trade in China is one which depends on the decision of His Majesty's Government. and this decision will greatly influence the future international trade position in China. It cannot be doubted that there are in the Yangtze valley openings for a combination of British industry and British finance, which could be handled in a manner not possible to the Japanese with their smaller resources and inferior experience and skill. Should these openings be used to the fullest extent, and British capital and industrial experience be devoted to China in larger measure than formerly, the Japanese may find it difficult to maintain the still rather precarious bold on China's resources which they have managed to acquire of recent years in this region."*
Prospects for British Trade in China.
The Department of Overseas Trade," Trade Report on China (1919 and 1920 Reports), confirms this optimistic view, and notes the satisfactory recovery of British trade since the armistice, especially in piece-goods. British trade is limited more by diminished output at home and by uncertainty of delivery than by any falling off of demand in China. A perusal of Part I of this memorandum shows how firmly rooted are British interests in China and how wide and vigorous are their ramifications. British commercial interests in China are founded on our exceptionally strong position in shipping, finance and trade, due to the fact that our merchants were first in the field and have won and retained an exceptionally high reputation for the quality of their goods and the fairness of their dealings. The value of our trade and of our industrial interests have increased year by year, even during the war.
But at the same time, a glance at Appendix XI shows that the British Empire no longer overshadows the trade of China as it did twenty-five years ago. Then, we monopolised 70 per cent, of the total trade: now, we can only claim 43 per cent. This does not indicate any kind of failure upon our part. It only shows that others have followed where we showed the way. Competition has arisen where formerly there was hardly any. So far from such competition necessarily damaging British trade. it ought to stimulate our people to further efforts. The percentage of our trade in the China market may decline, but its volume should increase. To quote the Department of Overseas Trade. Trade Report on China, 1919
When one considers that. with a population numbering at a modest estimate 350,000,000, ('hina's total imports of foreign goods in 1919 amounted to only 647,000,000 taels, being an average of 1.85 taels (say 12s. 6d.) per head, it is obvious that there is room here for great expansion, and there is no reason to believe that British goods will not share in the increased demand that must come with the rise in the purchasing power of the people when the country's resources are more fully developed and her exports to foreign countries are correspondingly increased."
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