CAPITAL IN CHINA.

Dominion, Volume 2, Issue 460, 19 March 1909, Page 5

CAPITAL IN CHINA.

CANTON-HANKAU LINK. OPPOSITION TO A GERMAN LOAN. PROBABLE, WITHDRAWAL. (IIT TELEGRArn—rKESS association—corviuoiiT.) Lentian, March 17. Router's Peking correspondent reports that it is oxpected that a German loan for tho Canton-Hankau railway will bo withdrawn owing to opposition from English and French quarters.' A MYTHICAL ASSET. , The Canton-Hankau lino is one of half-a-dozen Chinese railway construction works concerning which British capital has complained of breach of contract by China. Tho positions of tho Shanghai-Ningpo and tho lientsmYangtszo lines havo already been explained. The option of the construction of the CantonHankau railway was secured by the British, under tho terms of the Hong-Kong loan, which was granted to China for the repurchase of tho concession from the original holders, an American syndicate. British and French capitalists havo, howovcr, become wary since it has been stated that one of the assets on which China, raised tho last Anglo-French loan of .£5,0(10,0(10 has no existence. • According to tho Peking correspondent of "Tho Times," tho Chinese Ministry of Comniunicatras, presided over by Chen-pi, falsely represented to the lenders that it had in reserve a sum of .£1,150,200. Subsequently tho Ministry of Communications endeavoured to raise a local loan of ,£823,000 towards making good , tho missing asset, but Chinese distrust of their own "corrupt and incompetent" Ministor, Chen-pi, was so great that there was no response to the popular appeal for subscriptions, although 7 per cent, interest was offered, along with ,1 share in the profits of the railway. This has depreciated tho credit of tho Chinese authorities and driven them to seek money from foreign banks. This, no doubt, is where the German loan (nowlikely to be withdrawn) camo in. "Investors," says the Peking correspondent of "The Times," "will cease to lend money to China on a Government guarantee without effective supervision over expenditure." He has sinco instanced tho Shanghai-Ningpo railway as a caso of tho squandering of British capital through tho Chinese violating their agreement to work under the supervision of a British engineer.