CHINA AND THE GREATER POWERS.

Taranaki Daily News, Volume LIV, Issue 310, 27 June 1912, Page 4

CHINA AND THE GREATER POWERS.

The full extent of China's borrowing proposals has not -been revealed, but it appears that a sum of £60,000,000 is to be advanced to the. young republic immediately by the banks of Europe and America. The terms of this loan should help our Reform friends to understand why New Zealand was not able to sell her 3y 2 per cent, debentures in London this year at par (comments the Lyttelton Times). The interest payable by China will be little short of 6 per cent., and the security will be unimpeachable, being nothing less than the guarantee of the Governments of Britain, the United States, Germany, France, Japan and Russia. The six Powers will not be required to state explicitly their connection with the transaction, but it is well understood -that default on the part of China will be a matter of international action, which almost certainly would take the form of interference witli the country's internal affairs. From the point of view of the Chinese people the deal is undoubtedly a dangerous one, however attractive it may seem in the eyes of foreign investors" The country is still racked with disorder and discontent and some of the outlying provinces are showing an inclination to disregard the authority of any central Government, a full measure of local autonomy being demanded. The borrowed money will be spent quickly, much of it probably being wasted, and then the payment of the interest will become a matter of extreme difficulty. But directly China fails to ineet her obligation the Powers -will apply pressure in the interests of the bondholders. Some critics have stated that the big loan, which is expected to be followed by another one nearly as large, is really a subtle device to bring about the partition of China, with the accompanying opportunities for securing profitable concessions. This view no doubt is an exaggerated one, but it is fairly clear that China is being made to pay very dearly for the sin of being sick and poor. Incidentally, her financial necessities are raising the price of money to New Zealand.