THE POSITION AND WORK OF FOREIGNERS IN CHINA
The privileges of foreigners in China—The open ports and the
concessions—Great extension of privileges granted to foreigners by
the treaty of Shimonosaki (1895)—Opening of fresh ports—Facilities
conceded to commerce, and the right of establishing factories in
the Treaty Ports—The speedy effects of these concessions—Silk
industries—Chinese workmen: rise in their salaries—Prospects of
Chinese industry—Fresh concessions granted in 1898—Opening of the
waterways—Railways and mines—Great expectations resulting from
these additional treaties—The _likins_, or native
Custom-houses—Their oppressive exactions—Slow development of
foreign commerce in China—Necessity for Europeans to penetrate
into the interior and take their affairs into their own
hands—Chinese resistance to this proposal.
Foreigners who live in China, with the exception of the missionaries,
are at present penned up in the twenty-six open ports, to which may be
added six other towns or markets, situated on the frontiers of
Indo-China, assimilated to the free ports, but doing a very limited
trade. In each of these so-called open ports[26] spaces have been let on
long leases, or even sold to foreign Powers—England, France, the United
States and of late years even Germany, who has acquired a concession at
Tien-tsin, where, by the way, Japan also has one. Although these
concessions are on Chinese territory, they are considered as so many
small republics, independent of the native authorities, and administered
by Europeans, who reside there under the protection of their Consuls,
who hold both judicial and executive powers. In these ports, protected
by European law, is concentrated the whole foreign commerce of China.
The appearance of these treaty ports varies according to their
importance, from the few houses surrounded by walled-in gardens, built
on the sands of Pakhui to the flourishing cosmopolitan port of Shanghai,
whose aspect is admirably calculated to flatter the vanity of Europeans.
Once the bar of Wusung is passed, after some hours’ journey down the
Blue River, whose shores are covered with monotonous rice and cotton
fields, the traveller might easily imagine that he was in Lancashire, so
great is the number of factory chimneys that come into sight. The
landing-place, or Bund, the principal thoroughfare of the town, which
follows the quay, is lined on the one side with trees, and on the other
by magnificent houses, built in the European fashion, the offices of the
principal banks, steamship companies, etc. The other streets, inhabited
by Europeans, although not very straight or broad, run either parallel
to the Bund or else meet it at some point or other. Further inland is
the Chinese quarter (within the concession), with its open shops,
monstrous and gaudy signboards, and its fragile paper lanterns, fairly
well kept, however—thanks to European supervision—and forming a marked
contrast in this respect to the other native quarter beyond the
concession, which is absolutely filthy. Once outside the town, we cross
the cricket-field, the racecourse, the lawn-tennis court, and reach
Bubbling Well Road and other wide avenues, fringed with the beautiful
villas, surrounded by gardens, belonging to the wealthy European
residents.
Before the Chino-Japanese War foreigners only had the right to carry on
their commercial undertakings in the open ports, and had to have a
passport in order to travel in the interior. Isolated as much as
possible from the native population, they could traffic with the Chinese
only on the condition that they never attempted to alter any of the
native methods of production, or introduced any European innovations, or
endeavoured to exploit a single one of the innumerable natural resources
of the country.
On the other hand, nothing was to be expected from private initiative or
from the Government, which latter would unquestionably have vetoed any
improvement, and only reluctantly permitted, on account of its political
value, the creation of the telegraph-line connecting Peking with the
extremities of the Empire. In 1877 the Europeans had actually to pull up
the rails laid down on the short line between Shanghai and Wusung, and
though the Chinese since 1889 have pretended to consider the
construction of a line from Hankow to Peking, it has only been with the
object of misleading the Europeans. No progress is possible in China
under these unfavourable conditions, and the antiquated methods of the
natives continue to hamper all commercial and financial prosperity.
The treaty of Shimonosaki, signed in 1895 at the close of the war
between China and Japan, effected some very important changes in this
respect, and in virtue of the most-favoured-nation clause, inserted in
the treaties with the Powers, opened out a better prospect for
foreigners of every nationality, who were thus able to benefit by the
advantages conceded to the Japanese. Article 6 of this important
document stipulated the opening of several new ports, and permits steam
navigation along the coasts and up the rivers and canals leading
thereunto. It goes on to declare that foreigners may visit the interior
to purchase or sell merchandise, and that Japanese subjects may
establish depots for the same wherever they like without paying any
extra tax, and erect factories of all sorts in the Chinese open towns
and ports, and import into China all kinds of machinery on payment of a
fixed tariff. Goods manufactured by Japanese subjects on Chinese
territory should be placed on the same footing with respect to inland
and transit duties and other taxes, charges, and facilities for
warehousing, etc., in the interior, as goods imported into China by
other foreigners, and enjoy the same privileges.
This clause is of very great importance, since it permits the
combination of highly-perfected European machinery and cheap Chinese
labour in the production of articles the raw materials for which,
especially silks and cotton, can be obtained in the immediate
neighbourhood of the free ports. The clause above cited may appear at
first somewhat extraordinary, and in any other country but China it
would be superfluous to stipulate that goods manufactured in the country
itself should not be treated with less consideration than similar
articles imported. But the Japanese negotiators understood their men,
and are perfectly aware that if they had not inserted these special
clauses, the advantages obtained would have been annulled by the Chinese
authorities by a system of arbitrary taxation and other vexatious
measures.
No very long time elapsed before the advantages of Article 6 of the
Shimonosaki Treaty were made strikingly evident. In three years’ time an
entire district of Shanghai was occupied by not less than nine large
cotton factories, working 290,000 spindles, which in 1898 were increased
to 390,000, and close to them presently rose some thirty silk factories,
which, in due time, will be considerably increased both in numbers and
importance. In the other ports this industrial impulse has not yet been
much felt, except at Tien-tsin, where a woollen factory has lately been
established. In that great centre of industry, Shanghai, a certain
falling-off has been observed in this extreme briskness, due to
over-production, and also to a very legitimate desire to watch the
results of industries already existing before launching into further
speculations. Then, again, there was a fear that wages might presently
rise to an exaggerated extent.
The labour market of China is undoubtedly enormous, but the supply does
not respond as readily to the demand as in Europe, because the distances
are great and the means of communication correspondingly few and
difficult. However, the labourers living on the banks of the Yang-tsze,
who are called ‘Water-fowls,’ constantly flock into Shanghai in search
of work. They belong to that class of poor creatures who crowd the great
Chinese cities, and whose only home is their sampang, in which an entire
family accommodates itself in a space that would barely suffice for a
single European. One can see their floating huts moored alongside the
_arroyos_ that furrow the suburbs of Shanghai. Once they begin to earn a
little, they build a hut on shore, using up the material of their old
boathouse, until they can erect something better by way of a dwelling.
Salaries are distinctly rising in Shanghai, and when I was there in 1898
the factories were wrangling over their workmen and women—who are in the
majority—in consequence of certain enterprising but unscrupulous
managers of rival firms intriguing, by offers of higher wages, to induce
the most skilled to leave their employers and come to them. The quality
of the labour at Shanghai appears to be satisfactory, at least, so say
the different managers, and in the manufactories which I visited I
noticed that everything was scrupulously clean and orderly, quite as
much so as in any average European or American factory of the same
class. The workgirls do not live, as in Russia and Japan, and, indeed,
as they did formerly in England and in other manufacturing countries, in
a building near the place of business set apart for the purpose, and at
the expense of the firm, but at home with their own families. Many of
them are married women, and a great number, instead of leaving their
little girls over ten years of age at home, request that they may be
employed, so as to remain under their supervision. They are usually
engaged on very light work, such as shifting the cocoons in the boiling
water for the weavers. In the silk factories I visited they were allowed
half an hour every day for what was known as ‘school,’ during which some
senior workwoman—the mother or the elder sister—taught them the
rudiments of their work. This system is excellent, and the managers
declare themselves highly pleased with it, as it is likely to train good
workers.
The working hours at Shanghai in the silk factories are usually from six
in the morning to six in the evening, including an hour and a half for
meals. In the silk manufactories the little girls earn 1¼d. per day at
first, which is increased to 2½d. after a short time. A clever workwoman
gets about 9d. In 1891–92 the wages in the same factory, which was then
on a very small scale and under a Chinese name, were about 30 per cent.
less. In the larger factories the children got 2½d. a day and the women
from 6d. to 7d. During the first few months that elapsed after the
signing of the Treaty of Shimonosaki salaries were on an average about
5d. As exchange has not varied much since then, the rise is very
considerable. ‘The women and children now working in the better
factories here,’ says the British Consul at Shanghai in his Report,
1897, ‘can now earn from 10s. to 30s. a month, which is quite a fortune
for people who in the native factories rarely make more than 4s. a
month, although they work hard all day!’ The same Report observes that
in certain branches of industry the Chinese workwomen earn more than
would the same class in Italy. The under-manager who took me round one
of the Shanghai factories, a Peruvian by birth, and, I fancy, a coloured
man by origin, judging from his curly hair and high cheekbones, told me
that in his boyhood in Peru he had earned 2½d. a day at the same
business, which is what is paid to child-workers in Shanghai.
It is, therefore, a distinct mistake to imagine that China is destined
to remain the land of low salaries. Some considerable time may elapse
before wages reach the high figure obtained in Europe, but there is
every prospect that in the course of time a very considerable rise will
take place, especially as industry improves, and the demand for skilled
labour increases. The Celestials are pretty sure to look after their own
interests in the matter by forming trades unions. Strikes are not
unknown either in China or Japan.
These facts tend, I think, to dissipate, if not entirely, at any rate in
part, the illusion about the famous ‘Yellow Peril’ which has so greatly
disturbed certain worthy people. That ‘peril’ seems to me to be still
remote, for, even if the people of the Far East did succeed in producing
nearly all the articles which they now import from Europe, it would
necessarily follow that the trade in them, being infinitely greater than
it now is, would increase their profits likewise very considerably. It
is equally certain that the first effect of the introduction into China
of European industries must lead, as it already has done, to the
bettering of the condition of the Chinese labouring class, both by
augmentation of wages and consequent improvement in manner of living.
If, therefore, European export trade may apparently suffer from the
manufacturing of goods hitherto imported by the Chinese, such as
cottons, for instance, matters will balance themselves eventually for
the simple reason that, the richer the Chinese get, the more they will
buy. Japan has already shown how the introduction of machinery has
created a new branch of import of great value.
In order to realize these brilliant prospects, several very drastic
alterations in the present position of affairs are needed. The
permission, granted at the instance of Great Britain in 1898, allowing
European navigation on the inland waters of China, and the concessions
for the creation of railways and exploitation of mines, may subsequently
lead to very remarkable results, but up to the present they have not
been entirely successful. Industrial activity is still limited to the
free ports and their immediate vicinity. The reasons for this state of
affairs are worth examining, especially as they illustrate the
determined opposition of the Chinese authorities to all measures of
reform, and also indicate many points against which Europeans should
complain.
The Chinese Custom-house duties were determined according to the
treaties as much as possible 5 per cent. _ad valorem_. They may
therefore be safely described as comparatively light, and are collected
with great regularity for the Imperial Government on the European system
by a staff admirably organized by Sir Robert Hart.
The undesirability of exposing foreign merchants to the arbitrary and
corrupt methods of Chinese Custom-house officials led to the formation
of an international staff of officers, which works perfectly and gives
universal satisfaction. On the other hand, the great native firms are
most scrupulously honest in all their transactions, having discovered
from experience that ‘honesty is the best policy,’ and European
merchants can only praise their way of transacting business. It is,
therefore, neither on entering nor leaving China that difficulties
occur, whether for importation or exportation. The trouble arises in the
transport between the open ports and the places of consignment or
expedition; the principal grievance arises through the system of
_likin_, or of inland Customs, whereby an arbitrary and variable scale
of taxation is exacted on goods passing through towns or over the
frontiers of the various provinces, or even at certain determined places
on the highroads and rivers. This pernicious system is a great drawback
to the expansion of European trade, and gives rise to endless bother and
expense.
‘Let us suppose,’ said a gentleman, thoroughly acquainted with commerce
in the Far East, at a meeting of the London Chamber of Commerce in 1898,
‘that a train going from London to Newcastle had to be stopped three or
four times on the way, so that goods might be overhauled and examined by
officials whose main object is to extort as much as they can in their
own interests, and who value goods arbitrarily at sight. Imagine, for
instance, a consignment of skins getting damaged by the rain through
careless packing, and on being weighed found heavier than declared in
the invoice: the result is, that the luckless owner is charged, not
according to the increased weight, but _fined_ according to his personal
property, say £50 or; £100 on £1,000! Or, finally, what would become of
British trade if we had to put up with _likin_ officials, one of whom
examines goods once in every three days, and another announces his
intention of only doing so when ten trains have arrived?’
There is a remedy for the _likin_ system, and that is a ‘transit pass’;
but more often than not, as with most things in China, this is merely a
theoretical improvement. On payment of a sum equal to half the original
entry duty, all imported goods should be considered free of inland duty.
But this regulation does not work, and no one avails himself of it,
since the Chinese very ingenuously manage to evade it by charging ‘a
duty on arrival at destination,’ which comes to the same thing.
It is not therefore surprising that, with all these drawbacks, in
addition to a very rudimentary monetary system, Chinese commerce only
attains £50,000,000, of which £27,200,000 represents imports, which is
very small when one considers the enormous size of the country and its
great wealth. The half of this commerce is divided up between four
articles: £8,000,000 cotton and £4,800,000 opium (imported), and
£8,000,000 silk, and £5,000,000 tea (exported). The last figures are
inferior to what they formerly were, Indian tea having greatly affected
Chinese tea as far as England is concerned. Its preparation still
follows the old system, and its lasting quality is distinctly inferior
to Ceylon and other teas grown in India. This is another example of the
vast importance of introducing into China better and more scientific
methods.
The export trade of China must inevitably remain very limited so long as
foreigners are prevented from penetrating into the country and directing
the exploitation of its resources. Whilst it was a mere matter of
opening a few ports, the Chinese Government made no very serious
opposition; but only the realization of its incapacity to resist
pressure induced it to permit the introduction into the Celestial Empire
of foreign capital, machinery, and industrial methods. Well may we ask,
Can the Sick Man of Peking endure such violent treatment? Will he not
succumb to the very powerful remedies that are being administered to
him, and thereby fulfil the secret wishes of those who are anxious for
his legacy?