The nett value of the Foreign 'Trade of China shows a decrease of $10 million 2s compared with 1934) and of $402. million in comparison' with 1093, (he comparative figures: being in million dollars:—
1508
Nett_ Imports Exports rota: Tost Tes 1488 Excess of Imports: "T3345 340
'The reduction in the total volume of trade, though due in part o the Tnerease' in local manufacture, is very largely due to tke lack of condence caused by the uncertainty political conditions and aggressive Betions in the North.
While It is satisfactory to record} the increased export trade and the! lowering of the adverse balance of trade, this lowering of the adverse balance {s more apparent than real. as notwithstanding the increased effectiveness of the Preventive Ser-View where the Preventive Cruisers fare able to operate, very large and Increasing quantities of foreign imports, particularly sugar and artificial Silk, are being openly smuggled into China through the Demilitarized Zone which Is under the control of Yio Ssu Kung, who it wilt be remembered was the leader In the so-called Auto-amy movement, who is in charge of the Demilitarized Zone.
Smuggling In the North Smuggling has proceeded to such lengths that it is reported that even JJapanese merchants in Tientsin have petitioned their Consular authorities to take steps to prevent Japanese subacts from carrying on this nefarious {trade og it is causing serious loss to unate Japanese traders.
Toe bulk of the smuggling is opparently carried on in small vessels from Dairen and os the preventive Jcrulsers are not permitted to function [within the three mile limit, the land-
Ing of cargoes presents no great Smuggiing through the Demilitariz. Jed Zone could easily be controlled were the operations of the Chinese (Customs not negatived by the restric~ tion imposed by the agreement establishing the Demilitarized Zone which Is apparently now being used as a safety zone from which smuggling, Jean be carried on with impunity The extensive smuggling carried on not only causes serious loss of revenue to China, but seriously affects the troding interests of British and Jother nationals. According to the }Bank of China's report, it is estimat-fed that in 1935 goods to the value Jsome 210 million, viz. rather more {than 20 per cent. of the egitim imports were smuggled and that gold {to the value of 30 million and silver to the value of 230 million dollars Was smuggled out of the country as] Jagainst the recorded figures of legittmate exports of 38 million and £94 million respectively for gold and) silver. This estimate is conservative, the smuggled imports being probably nearer 300 million dollars.
Text read from the printed page and cleaned; old type leaves the occasional error.