Peking (Mr. W. P. Ker), reporting under date October 29, writes:—The first and immediate effect of the outbreak of war was the cossation of silver quotations, which precluded any business between China and foreign countries. This state of things, it is true, only lasted for lit days, but bank quotations for demand rates, which was resumed on August 9, were almost purely nominal, and business could only be done for small amounts. Owing to the dislocation of the export trade foreign banks in China found difficult to provide cover for dri ings on Europe and America, and were therefore unable to sell drafts as freely as they used. The banks hold large stocks of silver, and have been able to render valuable assistance to local business.
The extension to China of the area of warfare owing to the military operations in Shantung threatened at first to have a very serious effect on trade, but the depression was due mainly to the spread of alarmist rumours. These rumours have gradually subsided, and although the trade of Shantung will continue to suffer until normal conditions are restored in the province, the continued depression in the general trade of China is to be attributed mainly to other causes.
The import trade of China has been adversely affected by the fact that the demand for exports having stagnated no money is coming into the hands of producers, and exchange has consequently fallen by about 11 or 12 per cent., adding so much to the cost of goods to the Chinese consumer. The result that the Chinese curtail their orders in hope of better times. There is, however, a fairly healthy movement of existing stocks towards the interior.
The export trade of China has been most seriously affected by the closing of the European markets. Tu normal times silk goes in larger quantities to France than to any other foreign destination. Tea will not be much affected until next spring or summer, but if the war continues the Foochow trade, which depends largely on Germany, will be ruined. As for general produce, much of the trade has been largely in the hands of Germ: firms, and the financial difficulties in which these have been involved on account of the war constitute a further obstacle to the export trade. Straw braid has, for the last ten years, been mainly exported from Tsingtao; since the investment of thia port, however, endeavours have been made by Chefoo exporters to encourage straw braid dealers to revert to the old trade route vit Chefoo, The Extension of British Trade.
As regards any opportunity for the extension of British trade in China it should be noted that goods of British origin have already an overwhelming preponderance over those of German origin. Out of the £39,000,000 worth of goods imported into China in 1913, the imports from the British Empire were valued at £50,000,000. Of these £15,000,000 worth came direct from the United Kingdom, and £26,000,000 worth from Hongkong, which latter was largely composed of United Kingdom produce and manufactures. Japan is the chief competitor of the United Kingdom in the import trade of China, her share in 1913 having represented a value of £18,000,000, whereas Germany only supplied goods to the value of £4,000,000. The principal articles of which the import from Germany exceeds that from the United Kingdom are arms and ammunition, artificial indigo, paper, aniline dyes, electrical goods, hosiery, and lamps. In the last three years Germany has overtaken British manufacturers in the supply of electrical goods, but there is reason to believe that much of the apparent German success is due to unsound methods of financing business in China which will not survive the present upheaval, and one may confidently anticipate 9 gradually expanding market in China for British electrical supplies.
The chief point of interest to British traders as regards the export trade of China is whether they will succeed in capturing the trade in produce, other than silk and tea, which is now largely in the hands of German merchants. This question is not entirely of local interest, as trade relations established by an exporter react on the import trade which may be carried on by the same merchant. The main reason why British firms have hitherto held comparatively aloof from the export trade in produce from the Yangtze
Text read from the printed page and cleaned; old type leaves the occasional error.