THE CHINESE TRADE BOYCOTT.

Hawke's Bay Herald-Tribune, Issue 202, 11 September 1937, Page 4

THE CHINESE TRADE BOYCOTT.

Tlie news we are getting with regard to the conflict of arms between Cliina and Japan, in botli the northern and Shanghai areas, is of such confused and frequently contradiclory nature as to make it impossible at this distance to judge how the tide of battle is really running. The general impression probably is that, though the Chinese, at Shanghai at any rate, are putting up a much stiffer resistance than was expected, victory must ere very long come the w'ay of the very much better organised, trained and equipped, and probably much better directed, land, sea and air forces of Japan. There is, however, in operation an unseen force of which we hear ^ery little but which, should the war be at all protracted, must tend very seriously to cripple Japan at the source of supply. That is the revival in intensihed form of . the boycott of Japanese goods in Chinese markets. Indications of the effect of this are already to be seen in the occasional short and seemingly insignificant cables we have had during the last week or two with respect to measures that are being adopted at Tokio for cutting down iinports, even of raw material, with a view to rectifying the balance of trade which, largely as a consequence of the boycott in her handiest and chief market, is now tipping very badly against Japan. • As a recent writer points out the trade boycott is a Chinese weapon which strikes at the very heart of the Japanese economy, and it is a form of attack that is not easily countered. Obviously, the best way of ove rcoming it would be to adopt a conciliatory policy that would regain the friendliness of those employing it. Japan has, however, chosen to attempt overcoming the difficulty by military adventures and the seizure of political control to enforce subjugation of trade offensives, but this method cannot be applied to the whole of China. Moreover, while Japan was able to set 'up Manchukuo, she had to pay a heavy cost in loss of trade. In September, 1931, the Chinese merchants placed their boycott on Japanese goods, and in three months Japan5 s trade to China fell by no less than 60 per cent., with a loss estimated at over three million pounds, and the same type of severe losses must again be faced by Japan. At home Japan is confronted with a number of pressing ecopomic problems, including the continuous pressure of a rapidly expanding population, the struggling agriculture of a country where only some 16 per cent. of the land is cultivable, and industries fighting the obstacles of insufficient raw 1 materials within Japan, markets abroad restricted by quotas and tariffs discriminatory in purpose, and the burden of taxation for rearmament programmes. Many countries throughout the world have placed barriers against Japanese goods or Japanese immigrants. In spite of strenuous efforts and a „ "headlong trade expansion," Japan is contending with an adverse trade balance which is mcreasing, and the import excess for the first half of this year attained 618.3 million yen, almost reaching the total of 1924, the year after the great earthquake. The corresponding figure for 1936 was 271.9 million yen, illustrating the growth of a huge dehcit which the Government is now trying to stem by restrictions of imports. So, too, the expenditure of the Budget, which totalled 2206 million yen in 1936, leapt to an estimated 3409 million yen for the. 1937-38 Budget, with 526 million yen marked for a "North China Emergency Budget," with special taxation. To this has now to be added a further heavy vot.e to meet the cost of war commitments. This is to be hnanced partly by loan money, but, as that will have to be raised internally, it means depriving industry and commerce of capital resources much needed in those spheres. The result cannot but be to check popular enthu siasm for a continuance of military activities and to strengthen the hands of the already large seetion of Japanese publie opinion which is opposed to the aggressive policy thrust upon the country by the dominant militarist cult. All this is by no means without some direct interest to us here in New Zealand, for, as lokio cables have intimated, the proposed law to control trade is intended, among other things, to restrict the import of wool.- Already the Japanese Government has approached the Australian with a view to very materially reducing the quantity which, under the mutual trade agreement reached early this year, Japan had undertaken to buy from the Commonwealth, while it is said that there will be a complete cessation of purchases from New Zealand, Argentine, Chile and South Africa.