61
4
(c.) A blockade, to be effective, would therefore require to be of long duration. The blockade of an amorphous mass like China presents a very different problem from the blockade of a highly organised western country depending upon overseas sources for its food or raw materials.
(d.) In the present excited state of China the political effects of a blockade might be very considerable, and the probability of anti-foreign disturbances, even massacres, would have to be faced.
(e.) It would, therefore, be desirable to evacuate all foreigners from the interior and, no doubt, also, from the seaports unless these were occupied by foreign military forces, and this evacuation would be a matter of very considerable difficulty. It should be remembered that Shanghai has a foreign population of about 38,000, of whom about 10,000 are British. The alternative of military occupation might be interpreted by the Chinese as an act of war, when a wholly different situation would be created.
(f.) Evacuation of foreign subjects would mean the abandonment of foreign concessions and settlements, together with the valuable foreign property they contain, to undisputed Chinese control.
(9.) If foreign populations were not evacuated, special services might be
required for their provisioning.
(h.) Foreign trade with China would be at a standstill. The ports of Hong Kong and Shanghai, for instance, would be inactive. Coasting and foreign shipping trade, of which the British share is about 29 per cent. and 26 per cent., respectively, would cease.
(2) Foreign trade once suspended, the customs revenues would almost dry up. It may be mentioned in this connection that of a total Chinese Maritime Customs Revenue for 1925 of about £124 millions, Shanghai contributed about £4 millions. Almost the whole of the present customs revenues are applied to the service of foreign and domestic secured loans, 70 per cent, of the available funds going to foreign and 30 per cent. to domestic loans. As the revenues fell off, the question would arise for the first time as to which of the two kinds of loan should suffer. The foreign loans have a prior charge but if the internal loans defaulted the animosity of Chinese banks and merchants might be aroused against the Customs Administration, the value of which at the moment they very highly appreciate. If foreign loans fell into default we should damage a large British bondholding interest. The British holding in loans secured in the customs has been estimated at as much as £20 millions, and it may be more.
16. Nothing in the past attitude of the Treaty Powers gives us any reason to believe that they would be prepared to exercise effective and sustained economic pressure upon China as a whole. For one thing the large Japanese economic interest concentrated in Manchuria and the presence there of about 200,000 Japanese subjects almost certainly precludes their taking part in such an operation. Moreover, it is exceedingly unlikely that Japan would be prepared to forgo for even a short period her trade with China, which is now as great as ours and even more vital to her than ours is to us. Further, the suspension of British trade alone would not only be almost ineffective as a measure of coercion, but would operate to the profit of our trade rivals, would perhaps permanently breach our predominant position, and would intensify Chinese resentment and concentrate it even more strongly than at present upon ourselves alone.
17. Whether or not we should in the present circumstances be under any obliga- tion under Article 7 of the Washington Treaty, we should no doubt for political reasons think it right to inform the foreign Powers, parties to that Treaty, of our intention to impose a blockade. This would advertise our plan in advance and pro tanto lessen whatever efficiency it might possess, while other Powers might be tempted to make political capital at our expense by currying favour with the Chinese.
18. A Pacific Blockade, therefore, if complete and effective, would probably damage our interests more severely and more permanently than Chinese interests: if partial, under our leadership. it would be even less damaging to the Chinese and would adversely affect our own position, politically and economically, to the advantage of other foreign Powers.
5
19. There is, however, one consideration on the other side which should not be overlooked. A certain portion of internal Chinese trade is carried on by coasting vessels from the mouth of one river to that of another. If this were stopped a con- siderable interruption in the supply of consumable commodites such as rice, beans and tea might take place. It is claimed that the pressure of this kind created by the French blockade of the coast of China in 1884 was by no means negligible. This point is referred to again later.
The Effects of Applying Economic Pressure to China assuming a State of War.
20. A study of the Chinese trade statistics shows that foreign trade with China may be divided geographically into three main zones: (1) the outer provinces and Tientsin; (2) the angtse Valley; and (3) Canton and the south.
Since roughly speaking the territory now in possession of the Cantonese, against whom in the first place any blockade measures would be aimed, comprises the two latter areas, it may be advisable to consider them first. Here the situation seems at first sight favourable to us. Practically the whole of the external trade of the South of China passes down the Yangtse to Shanghai or down the West River to Canton, and the closing of these two rivers would therefore mean stoppage of foreign trade with the South of China,
The Yangtse Valley.
A
21. As regards the Yangtse Valley the value of the foreign trade of Shanghai and Hankow is nearly half the value of the total trade (Chinese and foreign, imports and exports) of the whole of China passing through the Maritime Customs. complete severance of this trade is, no doubt, physically possible and perhaps presents smaller difficulties than an attack directed on any other quarter of China,
Shanghai.
22. The year 1924 is the latest year for which complete statistics are available and the following analysis is in respect of that year. This is considered to be no disadvantage, since the trade of the years 1925 and 1926 has been rendered abnormal by the anti-foreign boycott which commenced in May 1925. The trade of Shanghai may be classified as follows:-
(a.) Foreign goods passing through the Maritime Customs. (b.) Chinese goods passing through the Maritime Customs. (c) Chinese goods passing through the Native Customs.
and these categories have been adopted in the following analysis :-
Imports.
23. (a.) Of the total foreign goods imported (valued at 483 47 million Haikwan taels, including re-exports) the greater part came from--
*
British Empire (including Hong Kong)
United States of America (including Philippine Islands) Japan (including Formosa and Corea)
Holland (including Dutch East Indies)
Germany
Per cent.
37'1
23'7
20:5
6.4
5*2
The following are the principal classes of foreign goods imported, of which the total value, excluding re-exports, was 301 21 million Haikwan taels:
Principally from--
British India, Japan, U.S.A.
Japan, Great Britain, Hong Kong,
Per cent.
Raw cotton
13.6
Cotton piece-goods
13.2
U.S.A.
Woollen and union piece-
3.8
goods
Great Britain, Japan, Hong Kong,
Germany, France.
Metals
5'6
U.S.A., Japan, Great Britain, Hong
Machinery....
2.8
* 1 Ilaikwan tael = 38. 74fd.
16's piculs = 1 ton.
Kong, Belgium, Germany. Great
Britain, Japan, U.S.A.,
Germany.
From Japan all re-exports.
62
No comments yet.
Private notes are available after approval.