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EXPORT GROUPS.
239. Whatever contribution or assistance the State may be able to render to industry, it is, in our view, essential that industry should help itself by creating organisations for the purpose of export trade. At present, many British industries do not exhibit any definite or co-ordinated plan in their attempts to establish or maintain themselves in overseas markets, with the result that there is often unnecessary competition between British manufacturers instead of a united front against the products of our competitors. Further, the absence of unity precludes expenditure on inquiry work, representation, and publicity, which are so necessary for intelligent production and increased sales. Very few firms can afford alone to carry the expense of a suitable overseas intelligence and sale organisation. It is the case, however, that certain sec- tions of British industry have adopted a method of stimulating their export trade and meeting even the most intense competi- tion abroad. This method consists of several firms within an industry grouping themselves together in a common export sales policy and under a single direction. They despatch trained men to foreign markets capable of investigating present and future market needs, and possessing the power to transact business. Successful examples of this system are the Steel Export Associa- tion and the South Wales Tinplate Corporation. Firms within these groups retain their individuality, but by combination for sales abroad and the adoption of a common export policy, enjoy the benefits of expert sales methods planned and carried out on a scale which they as individuals cannot afford. This method evolved by industry itself, is, in our opinion, one which offers most helpful possibilities.
240. We suggest that firms which are members of indus- tries producing for export should carefully consider whether the method of grouping for export purposes can be applied with profit to themselves. Motor cars, cutlery, hollow-ware, leather, boots and shoes, bicycles, porcelain and china-ware, canned goods, and aircraft are examples of industries in which individual firms might associate both for actual trading purposes and for the explora- tion of developed and undeveloped markets.
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CHAPTER XI.
CONCLUSIONS AND RECOMMENDATIONS.
241. The work of investigating and reporting on the position of Great Britain's trade with China and Japan has, of necessity, covered so wide a field that we have endeavoured to present the essential facts with brevity.
The question before the Mission, although specifically relating to China and Japan, raises the wider question of Great Britain's ability to cater for that half of the world's population which requires useful manufactured products at low prices. Do British industries, by their structure and methods, enable us to compete with our industrial rivals in the supply of these products?
Our investigation has shown that Japan must be regarded by Great Britain mainly as a competitor. While China will for many years be a customer for imported goods, there are in China many indications of increasing factory production, especially in textiles. We have indicated the steps which, in our opinion, are necessary to enable us to take our proper share of these large markets of the East, and in the following paragraphs we re-state briefly our conclusions and recommendations.
242. We first note that Asia-of which the great countries of India, China and Japan are chief-enjoys as yet not more than one-seventh of the world's total trade, though it possesses almost one-half of the world's population. China, with a population of 400-500 million, has a foreign trade of approximately 12s. per head, the smallest by far of any country in the world. If this trade could be increased to the level of that of India, the result would be the addition of at least £300 million to the annual foreign trade of the world.
243. Japan, like Great Britain, imports many of her principal raw materials, but as a result of a definite policy, is becoming increasingly successful in supplying her domestic needs of manu- factured goods. Moreover, her industrial productivity already enables her to market abroad, at low prices, a large surplus of manufactured goods. She is now the most formidable competitor in the world's markets with Great Britain's chief export industry, cotton goods, and her competition is also being felt in several other industries.
244. China presents an entirely different problem. She is indus- trialised on modern lines only to an insignificant extent. The first needs of the country are peace and transportation facilities, which must precede improvement in the standards of life and the volume of Chinese trade. In this market, the trade of Great Britain compared with that of other competing countries shows a most serious decline. Total imports into China have increased
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