CO129-501-5 Chinese situation- Recognition of Canton Government 22-7-1927 - 28-9-1927 — Page 40

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in China in suits between British subjects.

4. "His Majesty's Government are prepared to make

British subjects in Chine liable to payment of such

regular and legal Chinese taxation not involving

discrimination against British subjects or British

goods as is in fact imposed on and paid by Chinese

citizens throughout China".

We subscribe to this proposal provided His Majes-

ty's Government is determined to make its execution

dependent on the complete fulfilment of the conditions,

Taxation in China has for centuries been limited

only by the force which the tax-maker can bring to bear

on his victims. Today from the commander of a country

outpost to the Tuchun and the Nationalist Government,

the whole official Chinese hierarchy takes at each

stage exactly what it feels strong enough to take. Tariffs and schedules may be promulgated, but what is actually paid is a matter of bargaining, the one side pressing and the other side resisting as far as it dares. Often the transaction becomes openly a

gamble, new taxes being "farmed" out to syndicates who take the chance of extracting from the public a surplus over the amount of their tender. It is also

not uncommon to increase actual taxation by collecting such fixed levies as the taxes on immovable property for several years in advance, both sides being fully aware that the prospects of countervailing remission are nil. We, therefore, consider it imperative that His Majesty's Government shall sift with the utmost

care

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