There are many who feel that many of the mosures undertaken by Governments in the West to assist recovery, have in point of fact re-farded if, and that it were better to allow the law of supply and demand free play rather than attempt by. artificial devices to modify the effect fof a law which must eventually come. into its own again. Trade needs confidence even more than. money but Until the real replaces the artificial, it can hardly be expected that con-Adence will be re-established.
In this connection the composition of the monetary Advi-ory Committee established by the National Government and their terms of reference particularly when considered in the light of the inaugural address. given by HE. Dr. Kung should inspire confidence that no arbitrary artificial steps will be taken by the Government which might jeopardize the economic welfare of China.
While in these days of intensive nationalism itis but. natural that tariff" barriers should be erected either for revenue producing pur-Poses or for the protection of indus-{ties In process of development it is) difficult to understand or appreciate Tegisletion such os the Industrial Encouragement Act which while on the tone hand encouraging the develop-Chinese penalizes the proment of industries with 100 per cent.
ducts of factories in which there foreign investment. It is difeult to understand a policy which seems to discourage the investment of foreign. capital in China particularly at a time when it would seem' desirable to attract as_much capital as possldle from foreign countries either in the form of cash or material investment, and it is hoped that the Toric ation may be modified. "Spoon fed" industries are unlikely to atom strength and, tough spoon feeding may be necessary in the early stages, unless an Industry is able to meet legitimate competition, the necessity of assistance of the kind specified in the Industrial Encouragement. Act Indicates that there is something, radically wrong either in methods or management.
Though China is primarily an agricultural country it is, as has been ald, steadily developing industrially and though some of the industries are Row passing through diMeult times due to the depression it Is probable that the Increased effort snd closer attention to the essential details of ood management will result in their emerging more virile, more efficient, and better able to cope with compet. ion from abroad even. without. the advantage given them by protective duties. addition to the manufacturing plants of many different kinds now operating in China, considerable "development has taken and is taking place-in the establishment and exten= sion of public utilities such as. elec-trio power plants, which are operat-Ing successfully "and profitably in. Many cities, providing ight and in many cases power to large and small industrial plants.
The extension of roads and highways in China is proceeding very rapidly and is already doing much to improve the lot of the inhabitants in the rural districts. This road development has brought with ita de. mand for moter transport of all kinds for both passenger and. goods trafic and though so far the demand is for the cheaper type of vehicles, it will soon doubtless be recognized that reliability obtainable for a slight additional capital outlay, is amply. compensated by the Increased earning capacity.
Road making equipment is also in demand but so far British makers do not appear to have secured such proportion of the trade as should have come to them.
"Though these roads to some extent compete with the railways, they also act as feeders for them, bringing pre. duce and passengers from interior points to the nearest rail connections, and they thus should be of great as: distance to the existing as well as the projected lines, and lead to const. derable improvement in the revenues of the trunk and feeder lines.
During the year under review there has been considerable extension railway construction both a3] regards extensions of existing lines and the building of new ones.
The absence of adequate means of transportation has long been regarded asa brake on the progress of development of the country. The closer
the opening up of highways and rail. Intercourse now rendered possible by ways should do much to stabilize the country and prevent those civil wars, to which but a few years back China was so prone, and bring prosperity the country districts.
Text read from the printed page and cleaned; old type leaves the occasional error.