Directory_and_Chronicle_1937 — Page 394

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CHINA

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currency in terms of gold and of commodities, and led to general deflation and the cripping of China's export trade, resulting in turn in a reduction of the purchasing power of the masses. Such a position being found particularly damaging, and the measures adopted in October 1934 to stem the tide of deflation and to prevent the exodus of silver from China proving inadequate, it was left for the year 1935 to witness the statesmanlike steps taken by the Government for the nationalisation of silver and the stabilisation of exchange steps which, despite the doubts entertained in certain quarters as to their feasibility in a country long accustomed to hold the white metal in high regard, appear already justified by reports from those quarters where the reforms have not only been successfully carried out but have been generally welcomed as being beneficial to trade even in the short period elapsing between the time of their initiation in early November and the close of the year. It is confidently hoped that the monetary reforms so successfully launched will make for an increase in the volume of trade without the undesirable feature of an unduly disproportionate adverse balance. In regard to trade in general the most striking feature of this and of recent reports is the growing self- sufficiency of China in, and her increasing independence of foreign, "consumers' goods." Especially is this noticeable in the decline in th import from abroad of cotton and woollen textiles, oils, fats, chemicals, miscellaneous metal manu- factures, and sugar, while alleviation from floods and drought combined with the efforts being made for the improvement of agriculture, will, no doubt, in time make her largely self-supporting in the matter of cereals, which have in the past constituted so large an item in her adverse balance of payments. In regard to exports, there is ample evidence that, even in spite of poor prices ruling in recent years, China retains her hold on the market for many of her staple comomdities of erport, and in certain cases, such as wood oil and tungsten or wolfram ore, is most favourably placed. The demand for her egg products, hides, skins, wool, oil seeds, and tin has been well maintained, as also for such a raw cotton as is available, while there has been a welcome revival in her silk trade during the year under review. Reference has been made to the activities of the National Economic Council towards the improvement of the cotton industry, sericulture, tea, etc.: these, combined with the rapid progress being made in the improvement of internal communications by both road and railway, increasing the rapidity and scope of transport, reducing costs, and solving the problem of distribution and marketing, are all having their beneficial effect. On the whole, discounting certain adverse features, China may be well satisfied with her trade statistics for the year 1935 and may look forward with some assurance that, as world conditions improve, there will be a complementary expansion in her trade and a greater measure of stability in her economic position.

CONDITIONS IN 1935.

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With the exception of further anti-communist drives in the west, China enjoyed a year of peace. Rumours of a separatist movement in the North gained credence during the year, especially in November, and certain political elements made an abortive attempt to stage a coup at Tientsin, but the move- ment ended in failure, the only outcome being a declaration of autonoiny in Eastern Hopeh by an administrative inspector of the demilitarised zone in the Luanchow-Shanhaikwa 1 area. On the 27th November Japanese troops occupied the railway stations at Fengtai (), 12 miles south of Peiping, and at Changyimen (M), on the branch line connecting the line to Tientsin with the line to Kalgan. On the 1st December General Ho Ying-ch'in, Minister of War and newly appointed representative of the Executive Yüan at Peiping. proceeded north in an effort to reach a satisfactory agreement for the adminis- tration of the northern provinces, the immediate outcome being the formation of the Hopeh and Chahar Political Council under the chairmanship of General Sung Cheli-ynan, former Garrison Commander for Peiping and Tientsin. This new administrative body was inaugurated on the 18th December 1935.