JAPAN AND CHINA

Dominion, Volume 12, Issue 239, 3 July 1919, Page 5

JAPAN AND CHINA

PROTEST AGAINST ALLIED BANKING COMBINE By Telegraph-Prcis Assoclation-Copyri&hi New York, July 1. The Tokio correspondent of the New York "Times" states that tho Japanese Press is voicing a strong protest against the proposed formation of a "consortium" of British, American, French, and Japanese bankers for the purpose of extending financial assistance to China. The papers declaro that the plan would deprive Japan of the special position and privileges she has heretofore enjoyed m China. The Washington correspondent ot the New York "Times" reports that official advices state that the Japanese Foreign Minister. Mr. Abata, has protested to the Chinese Government against the continued boycott of Japanese goods in China, as tho result of resentment over the Shantung settlement.—Aus.-N.Z. Cable Assn.

ABOUT THE LOANS. In pre-war days, China was financed almost exclusively by the Six Power Group, which formed a ring only, rarely broken by such outside transactions as the Crisp Loan of 1912 or thereabouts. At the beginning of the war Germany naturally dropped out of the Six Power Group, and Russia later followed suit, while for obvious reasons. President Wilson had already strongly discouraged American bankers from taking iiart in negotiations which might lead to tho establishment of alien economic domination of China. The Six Powers were therefore reduced to three, and tho group was, for practical purposes, broken up. The latest transaction consisted in tne construction of a new Four Power Group, representing Great Britain, America, France, and Japan, with the prospect of tho future accession of Belgium- though it might have been supposed that Belgi.ui financiers could find even more effective openings for investment nearer home. The 1919 Consortium exhibits (says Mr. H. Wilson Harris, in the "Daily News") several new features, which, if their early promise is borno out, will make its operations distinctly more favourable to China than those of its predecessors. It- will, for example, embody no Government guarantees. The Americans have stood out firmlv against any arrangement which might involve tho Western Governments in a debt-collecting campaign, and the transaction will threaten China with no passible infringement of her^ sovereignty. All future loans to the Chinese Government, or to individual provinces, Will be made by tho group as a whole, and the responsibility shared pro rata by the' participating banks. What is more important, there is a proposal that tho existing interests of the participating banks in China should be similarly pooled. Such a proposal, if carried out, would have far-reaching effects, for it would moan that particular Powers no longer bad a predominant influence in particular regions of China, 'i'ho importance of that doctrino in it* {■jipliciition ho 'Japan's interests in Shantung for example, is obvious. However (his nroposal may be. decided, it has been definitely laid down j that no future loans shall bo allowed to ii.volvo the creation of special spheres of influence anywhere in China. Clnnose opinion, I ■understand, is entirely favourable to a Consortium on the.se lines, and there is strong reason to hope that the conclusion of the negotiations will result in a marked stimulation of tho development of Chine's transport system and of the exploitation "of her vast mineral resources.