October 21, 1892.]
THE BOMBAY YARN TRADE WITH CHINA.
AN EXPERT'S VIEWS UPON IT SFUTURE. We take the following article from the Times of India
CHINA OVERLAND TRADE REPORT.
steadily increased) in the face first of Japanese competition, and more recently of Shanghai competition. I am disposed to predict that the Bombay trade will continue to increase as long to this I shall say more later on." as the fiscal conditions remain as they are. As
dustry likely to develop very much in the near
We then asked:-"Is the Shanghai mill in future, and will it be able to thrust Bombay yarn out of the market ?" Our correspondent's
answer is :-
847
expected. The tendency throughout China for wages (in silver) to rise, Copper cash in silver are dearer, and workmen require higher cash wages; so wages are rising in a double way.
"
Discussion of the subject of taxation opens up regarding which our informant observes:— large and somewhat complicated considerations,
In the present oritical condition of the mill industry of Bombay, the future prospects of the Indian yarn trade with China have become a matter of vital interest for local shareholdere and millowners. Upon the China trade the Bombay mille still depend in a very large mea. sure. The last available returns show the have been very discouraging. Some of the inland market on a further payment of 11-20
exports of cotton twist and yarn from the port of Bombay to have attained an annual value of 504 lakhs of rupees. Of this quan. tity, not less than 557 lakhs worth was sent to Hongkong and the Treaty Ports. During the past twelve months there has been con- siderable controversy regarding the future of this lucrative trade. On the one hand, there have not been wanting prophets of evil who have predicted its early collapse. The Bombay mill- owners have been adjured to turn their atten- tion at once to the spinning of finer counts, in order to prepare themselves for the time when their coarser products would be thrust out of the markets of China. On the other hand, more cheerful counsel has bocu proffere: by a party of extreme optimists, led by Sir George Cotton, who recently expounded a highly favour- able view of the future of the yarn trade with China, at a meeting of the Millowners' Asso- ciation. We took occasion to differ from some of the statements Sir George Cotton then ad- vanced, while acquiescing in the hopeful con- clusions at which he arrived. Our comments had reference mainly to points of detail, and not to the general opinions expressed, with which we were in complete accord. Our own view upon this important subject has been more than once summed up by us in the statement that the Bombay exporters might look for a continuance and even an expansion of the yarn trade with China, for a period the end of which is certainly not yet in sight.
But in spite of the amount of discussion ex. pended upon the China yarn trade, it has re- mained obvious that considerable difference of opinion regarding its future prevailed among In- dian experts. The existing perplexity has not been lightended by the contradictory reports emana- ting from British Consuls in China during the last year. While a Consul in one Chinese com- mercial centre would declare that his district Indian yarn was in greater demand than ever, another Consul in an adjoining province would report that imports of Indian yarn were rapidly diminishing in his neighbourhood. To select a couple of examples at random, may be noted
"I think it is very unlikely that the Shang- hai mill industry will increase. The results mills have paid a dividend, but it is admitted that this was not paid out of the legimate pro- all the mills are at a heavy discount, and the fits on the working of the mills. The shares of prospect is distinctly gloomy. The profits would fore foreigners would again invest their money have to be considerable for a term of years be- in this industry; and the Chinese owned and managed mills are so far behind the foreign mills that I do not think Chinese capitalists this direction." will again be induced to employ their money in
Our third question was:-"Will not the impending opening-up of further markets iu exporters, as has been the case at Wuchow China give favourable opportunities to Bombay Regarding this point, our informant writes:-
The consumption of yarn is sure to increase as facilities of communication increase, and as illegal taxation is suppressed. It is not only difficulties in the way of foreign trade expan- that at present there are physical and official sion; but the native's capacity for buying is restricted by his inability to make the most of the resources of his country. What is generally known as the opening up' of the country | that is, the working of mines, construction industries, will provide work for many idle of railways, development of manufacturing hands, and enable them to purchase more freely. The Wuchow figures-as those of other new ports may be misleading. What, in the foreign Customs' returns, is now credited to Wuchow, formerly was included in the Canton book-keeping. Formerly steamers could not or Kowloon returns. It is largely a matter of
go beyond Canton; from there, goods were dis- tributed by junk; of junks the foreign Customs take no cognizance; so Canton was looked upon as the consumer. Now, if goods are re-shipped from Cauton by steamer the Customs take no- tice of the fact, and the further port, instead them. Again, the Wuchow Consul may van- of Canton, gets the credit of having consumed
quish the Wuchow mandaring over some likin fight, and the Canton Consul may be less suc- cessful; so a good many districts may be sup that the Consul at Ichang reported that purchas-plied via Wuchow, which ought naturally to be es of Indian yarn fell off, while consignments of supplied vin Canton. A new port brings about Shanghai yarn were received in increasing quan. tities, because Chinese officials interested in the
a transference of trade, and a re-arrangement Shanghai mills were favouring the native product-
of Customs statistics, but very little absolutely new trade." Yet a week earlier a report had been issued from the Acting Consul at Amoy stating that in that locality Shanghai yarn was unable on account of its higher price, to compete with the yarn from India and Japan." Instances of these varying opinions might be multiplied, and there is a possibility that the conflicting accounts may have had an unsettling effect upon com. mercial opinion in Western India. We have, therefore, entered into communication with a gentleman resident in China in other to obtain an authoritative expression of his views upon a topic of so much interest to Bombay; and he has been good enough to forward to us for publica- tion detailed answers to the series of questious we addressed to him. The name of our inform. aut is a household word in the Far East. He is familiar with every important trading centre in China, his experience of things Chinese ex- tends over many years, and he has enjoyed ex- ceptional opportunities of forming accurate and unbiassed opinions jupon commercial ques- tions. We may commend his views to the care- ful study of all who are interested in mainten. ance of the Bombay mill industry,
+K
Our first enquiry was whether, in our corres- pondent's opinion, the Bombay trade with China is at all endangered as yet. His reply
"Up to the present there are no indications that the Bombay yarn trade with China is threatened. Over a series of years it has
whether Chinese mills can beat Bombay mills Our correspondent proceeds to point out that must depend on the cost of raw cotton, the manufacturing expenses, and the differential duty. As to the cost of cotton he makes the following important observations:-
The
"Here I think the Shanghai mills will always be able to buy at the 'natural' price. be at a disadvantage-that is, they will never foreigu managers don't attempt to buy at first hand; if they attempted to have direct relations with the cotton growers they would be defeated by combinations, intimidation of the Chinese sellers, and all the usual Chinese knavery. So they have to buy in the Shanghai market. The foreign managers ought to be able to combine as sucessfully to keep down prices as the native brokers do to keep up prices. But they don't, and the reason is that the Chinese ring can terrorise over any backslider, and do wreak vengeance on him. Foreigners cannot that, The foreigner's safety valve India or America, but Shanghai mills were not is that he can import raw cotton from
erected with this object; and if it comes to importing Indian cotton it is simpler to import the ready made Indian yarn.”
Upon the question of manufacturing expenses he remarks:-
*" On this subject I cannot speak with know. ledge; but, up to the present, the Chinese labour has not proved as good or as cheap as was
"Native yarn has very little advantage over foreign yarn. Bombay yarn now pays 2 1-10 Haikuan taels per bale of 400 lbs. on import- ation; under transit pass regulation, which is not always respected, it may be cleared to an tael. Native yarn has now the option of paying 2 1-10 taels, and being franked through to any set, and take its chance of the likin taxation destination; or it may pay nothing at the out- along the journey. If, however, it is transported it must pay the 2 1-10 taels. So far I should by any craft coming under the foreign Customs say that foreign and native yarns are much on the same footing. Native yarn made of Indian cotton is at a disadvantage, for an import duty has to be paid on the raw cotton for which no allowance is made afterwards. This duty is 3-10 taels per 400lbs. This taxation of native yarn is not a matter of international convention. advantage under which native yarn labours is The Chinese may do as they like; and one dis-
that foreigners cannot, as in the case of foreign merchandise, take up the cudgels on behalf of for rights. The Chinese Government might, some Chinese friend, and appeal to his Consul
tries, and abolish all duties; but this is not their if it was enlightened, encourage native indus way; and of this there is very little prospect.
|
There is, however, one possible danger to the Bombay trade, lying concealed in the prospect of tariff revision. It will be observed that our correspondent, who has a sincere desire to from a standpoint not likely to appeal to Borabay promote the well-being of China, discusses it
merchants. He writes:-
"When tariff revision comes ou, import duties all round will probably be raised; and here Bombay may suffer. As it is 2 1-10 teals is not the 5 per cent which was meant to be the future tariff will probably be 10 per cent., and basis of the existing tariff. The basis of the
on these terms Bombay yarn would pay on entry about 7 taels. If the Chinese Government wish to foster native industry 7 taels would be a big margin; but, probably, the British negotiator would be instructed to see to this. This is against my views, for I would foster Chinese industries to the utmost; it would repay us in the long run; but, in Bombay that case, would have to be sacrificed to the good cause.”
Finally, we may add that we made some en- quiries as to the possible development of the mill industry at Hongkong, and the effect it might have upon the important trade in Indiau yarn now carried on up the West River, One correspondent, who evidently has much faith in the future of the Hongkong mills, writes on this point:
"I think the Hongkong mills (there is only one at present) are not in such a good position as the Shanghai mills. Labour is certainly dearer. If they use Chinese cotton they must pay export duty in China, and import duty again on the finished article; and if they import Indian cotton, they may as well import Indian yarn at
∙once."
It will be perceived, upon a careful perusal of this interesting and valuable communication, that the authority whose views have been vouch- safed to us has a cheerful faith in the continu- ance of the Indian yarn trade with China, fully equal to the robust optimism of Sir George Cotton. Our correspondent's opinions will, we trust, help to bring about that reassuring in- fluence of which the Bombay mill industry stands in such argent need at the present moment. The real menace to the Bombay yarn trade proceeds from within, owing to the un- sound financial basis upon which the industry has been built up.
roads of Macao, but we notice that the We used to hear a great deal of praise of the
road leading to the Boa Vista Hotel, one of the most frequented by foreigners, is in a most wretched condition and persons passing in and
of the entrance of
the Hotel.
1 ont ve danger to
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