May Discourage Foreign Capital senctat, 10 mae "xe, wasa""
The hew Chinese Insurance Act which has just been passed" by. the Legislative Yuan discriminates against foreign insurance. companies, De a Ying-chu, "hes explained. the motive! of the new legislation as a" precau. tionary measure to prevent the export of Chinese capital abroads 'i. Shen, Chinese manager of the Mani: facluters Life Insurance Company of Canada, ina press interview made 2 comment which has ten published in translation of which follows, several. Tocal Chinese' papers=the "Life insurance is a modern me stitution, "It eliminates "the" une certainties of life, protects the home, tonsures education for the children, and encourages the habit of saving, "Life insurance companies, founded fon the principle of mutual benefit the human race, answer avery vital social need, "Foreign companies have been transacting. Insurance. busines im China for over forty years, They have done a good deal of pioneering, work Ju educating the public to the value of insurance. In view of the failure of several Chinese companies, a. very Jarge number of "Chinese-"including many prominent. political and. finan lal Teaders—have taken out policies with foreign companies. "In recent Years, "several Chinese insurance companies have been organized. on modern "lines, "Due to" their short history, they are still not ina poss Mon (0 compete with foreign A Better Way "Perhaps the Government enacted the new legislation with the proteetion of the new companies in. mind, To.my mind, it would be far hotier for the Government to wy. 10 strengthen the standing of Chinese companies than to limit the activities foreign companies, I recall the ays when our people used to deposit their funds with foreign banks, Since the establishment of modern Chinese banks, the Chinese are tuming nese banking institutions for. the cooping of their savings, This change has taken place without inter-—~—~-ference on the part of the Government.
"Another obvious instance Is the electric appliances business," The Wason and other Chinese electric companies are manufacturing excellent electric fans, Not only the Chinese are using them to their satisfaction, but they are also bought by foreigners. During the past year a large quantity even found a ready, market abroad; but before the Chinese succeeded in perfecting the making of fans, the products" of "Edison," "Siemens" and "G.E."—companies rendered some very valuable service to those who had to work during the sweltering weather, There was no Feagon why China should ban, the im. portation of foreign made fans, just because she could not produce them herself. It the Chinese insurance companies will adhere to scientific management, considering that only a small portion of the vast field has been touched, their business will row rapidly.' Once they gain the' confidence of the investing public, not only will they be patronized by' the Chinese, but they may also extend their activities to foreign lands, Capital Not Exported "As to the question of exporting! capital abroad, I believe the accus: tion is greatly exaggerated. The! interest rates in this country are much higher than those prevailing in. foreign countries. It pays. foreign companies to invest their revenue! hhere because they can expect higher returns. An insurance company asa rule invests the premiums received in the currency of the country in which it operates in order to minimize losses in exchange. Although I am not in position to vouch for other com= panies, the Manufacturers Life has ever sent any silver funds in any} form abroad, while on the other hand, very frequently the heed office in Canada remits funds to China for investment purposes and to meet its obligations "insofar as) claims and, running expenses.
"Despite the fact that no accurate statistics are available, we may safely ay that the outflow of capital from China must be very small compared with the amount of foreign investments in this country, The salvation China ties in her industrial development, without which she cannot hope to raise the standard of living of her people. But industrialization is practically impossible without the aid of foreign capital. Any action onthe part of the Government to. Impede. the free movement of capital would make the foreign investor hesitate to put money in Chineve Industy. The Rew Insurance Act, therefore, may Produce some opposite effects to those the proposers might fave in rind, namely, it may retard rather than foster the industrial development the country.
Text read from the printed page and cleaned; old type leaves the occasional error.