CHINA'S FISCAL STATUS

Dominion, Volume 12, Issue 254, 22 July 1919, Page 8

CHINA'S FISCAL STATUS

FINANCIAL DISABILITIES

CLAIMS TO FREEDOM '

The memorial presented recently to the Peace Conference in Paris by forty-six chambers of commerce in China, representing twenty-two provinces, asking that tho treaty-making Powers permit that nation to exerciso tho right of fiscal autonomy on the same terms as themselves and other nations, draws attention onco again to a notable anomaly of the times. China has suffered many things at tho hands of the Great Powers. Ever sinco the end of the first so-called opium war, when tho 'anions five ports were opened to the trade of tho world, and Ciiina was compelled to come, very reluctantly, into direct contact with the West, she hfo been subject, from time to time, to restrictions entirely inconsistent with the rights of a sovereign State. The result of all this is, as is pqinted out by the memorialists, that China is bound toy international agreements not to establish a national tariff, but must enforce a 5 per cent, ad valorem schedule of imposts for imports and exports as established after consultation ivith the various signatory Powers. China can make no change in these rates without the agreement of the signatory Powers. In all her treaties, moreover, is inserted, as a matter of course, the most favoured nation's clause, which ..entitles any one Power to claim whatever Tights and privileges may be granted in China to any other Power. Finally, save for certain slight modifications secured in 1902, China's present tariff is based on conditions as they existed - sonio sixty years ago. China, therefore, is > ot only quite powerless to obtain additional revenue by raising or changing her tariff, but slie is obliged to admit a very large range of articles, articles, which, in most other countries, are classed as luxuries and taxed heavily, duty free. She :js, moreover, deprived of all power to make tariff reductions where sliq. might think it desirable on a reciprocal or compensatory basis. In a word, slio is deprived of a very large source of income, and is obliged to make good her deficiencies by having recourse to methods of taxation wasteful and undesirablo from an economic point of view. For years past, of course, China's chief difficulty has been the lack of funds sufficient to enable her to develop the country along modern lines. She has been at the mercy of the international moneylender, and thoso who had any knowledge of the scramble to lend to China in the years immediately preceding the war know how China was handicapped at every turn by her shortage of revenue. This shortage of revenue, as the memorialists to tho Peace Conference do not fail to point out, has reacted unfavour-, ably on all phases of national development, and in their opinion accounts, at any rate largely, for her present backwardness in education, agriculture, and finance.

, Tho question of tho relative virtues of free trado and protections does not enter into this issue, of course, for a moment. As far as tho powers are concerned, the question is solely one of international othics. In asserting her rishts to complete territorial integrity, China, as far as can be gathered, has already secured the sympathetic ear of "the conference, but, unless the Powers concerned are willing to make the self-denying ordinance by which they would abandon their right to dictate 'China's fiscal policy, their hands will lie tied when tliev attempt to assert her rights to territorial integrity and sovereignly.