The-Hong-Kong-Weekly-Press-1902-08-11 — Page 11

August 11, 1902.]

payment of import duty and surtax shall secure for foreign imports, in whosoever hands they may be, and whether in original packages or otherwise, complete immunity from all other taxtion, examination or delay; further the total amount of taxation leviable on native produce er export abroad shall, under no circumstances, exceed 7 per cent, ad valorem. The preamble fcocludes that "keeping these fundamental principles steadily in view, the High Contract- ing Parties have agreed upon the following methods of procedure," as given in the 16 sections which I will now endeavour to explain. Section 1 provides for the permanent abolition of all barriers of whatever kind collecting lekin and such like dues or duties on all roads, 'railways and waterways in the eighteen provinces of China and the three Eastern provinces (namely the provinces of Manchuria This provision does not apply to the native custom houses at present in existence on the seaboard or waterways, at the Treaty Ports, on laud routes and on the land frontiers of China. As to these custom houses I shall have more to say later on.

Section 2 provides that in addition to the import duty as laid down in the Protocol of September, 1901, foreign imports shall pay a special surtax equivalent to 1 times such duty in compel sation for the abolition of lekin and all other 'forms of taxation, but that this provision does not impair the right of China to tax salt, native opium, and native produce as provided for in sections which follow. It is further stipulated that goods entering China a01 088 the frontiers shall pay the same surtax as seaborne goods.

The 3rd section provides that all native custom houses now existing, whether at the Treaty Ports, on the seaboard, on rivers, inland waterways, land routes or land portions, as enumerated in the Regulations of the Boards of Revenue and Works, and the Dynastic Institutes, may remain, a list of them to be furnished, with their location, to the Bri ish Government, I should mention that the inland custom houses which are allowed to remain are the old custom houses which date their existence long before the days of lekin, they are few in number and for the most part are inter- provincial. The section goes on to give China Liberty to establish native customs offices wherever there are offices of the Imperial Mari- time Customs, as well as at any points either on the seal oard or land frontiers.

Permission is also given China to change the location of custom houses in the interior as circumstances of trade seem to require, but any change of location must be communicated to the British Government, and the original number of custom houses may not be exceeded.

The next clause in this section provides that goods carried by junks or sailing vessels trading to or from open ports shall not pay lower dues than the combined duties and surtax on similar! cargo carried by steamers.

We then come to the treatment of native pro- duce, it being provided that when such produce is transferred from one place to another in the interior, it shall, on arrival at the first custom house after leaving place of production, pay duty equivalent to the export surtax-that is to say a half export duty.. On payment of thi duty the produce will receive a certificate describing the goods and their intended destination; this certificate shall be valid for one year, and shall free the goods from all taxation, examination, delay, or stoppage at any other native custom house passed en route. If the produce is taken to a place not in the Foreign Settlements or Concessions of an open port, for local use, it becomes liable to the consumption tax as laid down later. If the produce is shipped from an open port the certificate is to be accepted by the custom house in lieu of the export surtax. The last clause of this Section prohibits the taxation of junks, or carts, beyond a small and reasonable charge to be paid at a fixed annual rate; this however does not exclude the right to levy tonnage or port dues on janks.

Section 4 provides that the present foreign opium duty or lekin, the latter to be known as a surtax in lieu of lekin, shall remain as at present.

Section 5 deals with native opium, and begins with a declaration that the British Government have no intention whatever of interfering with China's right to tax her opium, but that in the

CHINA OVERLAND TRADE REPORT. Į

arrangements for levying such taxation China, must not subject other goods to taxation, delay, or stoppage.

China is to be left free to retain at important points on the boundary of each province offices for collecting duty on native opium, where duties or contributions leviable shall be paid in one lump sum, which payment shall cover taxa- tion of all kinds within that province, each cake of opium being stamped as evidence of such duty payment. Excise officers and police may be employed in connection with these offices, but no barriers or other obstructions are to be erected, and the excise officers or police are not to stop or molest any other kind of goods. A list of these opium offices is to be made and presented to the British Government for record. Section 6 deals with the taxation upon salt and begins by declaring that lekin on salt is abolished, the amount of such lekin and other taxes and contributions being added to the salt duty, which is to be collected at place of produo. tion, or at the first station after entering the province of consumption.

China has liberty to establish salt reporting offices at which boats conveying salt which is being moved under salt passes or certificates examination and to have their certificates vised, may be required to stop for purposes of but at such offices no lekin or Transit Taxation shall be levied, and no barriers or obstructions of any kind shall be erected.

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Section 7 is an important one, and deals with the Export Tariff. It begins by giving to the Chinese Government permission to recast the Foreign Exports Tariff with specific duties as far as possible, on a scale not exceeding 5 cent ad valorem, but existing duties are not to be raised until at least six months' notice has been given.

In cases where existing export duties are above 5 per cent, they are to be reduced to not more than that ráte,

An exception is made in the case of silk, upon which no export surtax is to be levied, and no tax is to be collected at native custom houses which cocoons or silk may pass, but China is to be at liberty to charge an export duty on a specified basis equivalent to not more than 5 per cent, ad valorem. I may mention here that a great fight was made to get silk in at a lower duty, but all attempts were steadily combated by the Chinese Commissioners; they pointed out that with existing lotishui, now to be abolished, a 5 per cent, duty was less than silk of the argument that it was China's interest to was at present paying, and were quite regardless lower the export duty on silk, in face of Japanese competition. As a matter of fact I believe that a 5 per cent. duty is lower than what is at present paid, the report drawn up by the silk merchants in 1896 putting the total taxation as high as Tis. 49 per picul, and in the revision of that report made the other day it is stated that, since 1896, the taxation has in no way been modified, but rather increased.

The last clause of Section 7 deals with the surtax on export duty, which is declared to be

one-half of the duty payable on goods oxported either to foreign countries or coastwise. begins by reciting that the abolition of lekin Section 8 deals with the consumptive tax. It and the abandonment by Chia of all kinds of will diminish the revenue materially, and that internal taxation on foreign imports and exports whil the surtax on foreign imports and exports and on coastwise exports is intended to com- there will remain the loss of lekin on internal pensate in a measure for this loss in revenue, trade; it is therefore agreed China shall be at liberty to impose a consumptive tax on articles of Chinese origin not intended for export.

This tax is to be levied only at places of con- sumption, and not while goods are in transit, and the Chinese Government solemnly under- take that the arrangement which they may make for this collection shall in no way interfere with foreign goods, or native goods for export. The fact of goods being of foreign origin shall of itself free them from all taxation, delay or stop- page, after once having passed the custom house,

merchandise there might be difficulty as to its The point was raised that in the case of certain

inserted: "Foreign goods which bear a simila- origin; to meet this the following clause was rity to native goods shall be furnished by the custom house, if required by the owner, with a protective certificate foreach packageon payment

of

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import duty and surtax, to prevent the risk of any dispute in the interior.'

The section goes on to state that native goods brought by junks to the open ports, if intended for local consumption, irrespective of the na tionality of the owner of the goods, shall be reported at the native castom house only, where the consumptive tax may be levied.

As to the amount of the consumptive duty, this may be fixed by China, and may vary according to the nature of the merchandise concerned, that is to say, according as the articles are necessaries of life or luxuries; it is, however, to be levied at a uniform rate on goods carried by junk, sailing vessel or steamer. The of the same description, no matter whether consumptive tax is not to be levied within foreign settlements or concessions.

least satisfaction in connection with the Treaty, Section 9, I approach with feelings of the It deals with the question of excise on native- made goods of local manufacture, and in its provisions you will observe the exercise of a power beyond the means of Shanghai to deal with. I am further constrained to say that in to find the Chinese Commission rs, who in the the negotiation of this Section I was surprised

Sheng Kung-pao are largely interested in the persons of the Viceroy Chang Chih-tung and development of China's manufactures, ranging on the side of the Powers at home, and proving themselves utterly disregardful of the pos- sibilities attendant upon the development of native industries. That the excise on native manufactures has not been fixed at the full equivalent of the import duty and surtax is not the fault either of Manchester, Bombay, or China; this is not the occasion for me to give my individual views on the subject, I am merely engaged in explaining the Treaty, and will proceed with the Section

The first clause of the Section provides that an excis equivalent to double the import duty as laid down in the Protocol of 1901 is to be charged on all machine-made yarn and cloth manufactured in China, whether by Chinese at the treaty ports or by Chinese anywhere in China. Chinese raw cotton used in the mills is to receive a drawback of all duties, including consumptive tax, paid upon it. Raw cotton imported for use in the mills is to receive a draw- back for the import duty paid, and for two- thirds of the surtax thereon. (This in effect means a premium upon using Chinese cotton.) Excise is to be collected through the Imperial Maritime Customs, and after payment the yarn and cloth are to be free from all further taxation whatsoever. The same principle and procedure is to be applied to all other products of foreign type turned out by machinery whether by foreigners or Chinese.

Section 10 provides for the general supervision of native Customs affairs, the consumption tax, and the salt and native opium taxes by officers of the Imperial Maritime Customs Foreign Staff. This you will probably accept investigation of abuses, such investigation to be as a valuable safeguard.

Section 11 deals,with the question of the

Government of proper rank, a British officer and promptly made by an officer of the Chinese

an officer of the Imperial Maritime Customs. If pensation is to be paid from the surtax funds; the complaint is found to be well-founded com-

that the officer guilty of the illegal action shall the high provincial officials are held responsible

If the complaint is found to be unfounded the be severely punished and removed from his

post. complainant shall be held responsible for the expenses of the investigation.

Under Section 12 the following ports are opened under the same conditions as the ports pened by the Treaties of Tientsin and Nanking,

Changsha Wanhsien

Nganking Weichow Kong-moon

in Hunan,

Szechuen, Anhwei, Kwangtung,

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and the reason for claiming it as one open port Wanhsien is situated at the top of the rapids, was that the goods hauled up through the ning beyond. Weichow is on the West River rapids might be transferred to steamers run-

east of Canton.

entitled to e-tablish municipalities and police Foreigners residing at open ports are not of their own except with the consent of the Chinese authorities.

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