The Englishman in China During the Victorian Era, Vol. 1 (of 2) / As Illustrated in the Career of Sir Rutherford Alcock, K.C.B., D.C.L., Many Years Consul and Minister in China and Japan

by Alexander Michie

V. BRITISH EXPORTS.

Slow increase—Turn of the scale by the Shanghai silk trade—Consequent inflow of silver to China—Alcock's comment on the Report of Select Committee—His grasp of the true state of affairs.

This department of trade presents little else but a record of very slow improvement, with some rather violent fluctuations due to obvious and temporary causes. In the first year after the treaty of Nanking the value of shipments to China from the United Kingdom was £1,500,000; in 1852, £2,500,000; in 1861, £4,500,000, decreasing in 1862 to £2,300,000, and rising in 1863 to £3,000,000; after which period it steadily increased to £7,000,000, at which it has practically remained, with the exception of two or three years between 1885 and 1891, when it rose to £9,000,000.

The theory of the merchants who gave evidence before the Committee of 1847, that an increase in the exports from China was all that was needed to enable the Chinese to purchase larger quantities of manufactured goods, has by no means been borne out by the subsequent course of trade. For although the Chinese exports have been greatly extended since then, that of silk alone having more than sufficed to pay for the whole of the imports from abroad, there has been no corresponding increase in the volume of these importations. What happened was merely this, that the drain of silver from China, which was deplored on all sides up till about 1853, was converted into a steady annual inflow of silver to China.[25] Consul Alcock, having been requested by her Majesty's chief superintendent of trade to make his comments on the Report of the Select Committee, dealt comprehensively with the whole question of the trade between Europe, India, and China, and evinced a wider grasp of the true state of the case than the London merchants had done. In a despatch dated March 23, 1848, the following passages occur:—

Nearly the whole of the evidence furnished by the witnesses on our trade is calculated to mislead those imperfectly acquainted with the details. The existence of this relation [the importation of opium and raw cotton from India] is kept out of sight, and conclusions are suggested which could only be maintained if the Indian imports into China did not form a part of our commerce, and did not come in direct competition with the import of staple manufactures.

To counteract as far as may be in my power the erroneous tendency of the partial evidence which the Blue-Book contains on this part of the subject, I have ventured for the information of her Majesty's Government to bring forward such facts and inferences as seem to me to place in the strongest light the fallacy of the argument mainly insisted upon before the Committee—viz., that we have only our own consumption of tea to look to as indicating the extent to which we can exchange our manufactures—that this is the only limit of our imports into China. But imports of what? Not certainly of cotton and woollen goods, for we already export of tea and silk from China to the value of some four millions sterling, and cannot find a profitable market for manufactured goods to the amount of two millions; and a somewhat similar proportion, or disproportion rather, may be traced during the monopoly of the East India Company, during the free-trade period prior to the commencement of hostilities, and since the treaty. Say that from a reduction of the tea duties or any other cause we double our exports from China as we have already done since 1833, from what data are we to infer that in this same proportion the export into China of British manufactures will increase; or in other words, that for every additional million of tea there will be an equivalent value expended upon our cotton fabrics?

The anticipated result is contradicted by all past experience in China, and a moment's reflection must show that the essential elements have been overlooked. 1st, That there is a balance of trade against the Chinese of some $10,000,000, which must adjust itself before any increase of our exclusively British imports into China can be safely or reasonably expected, for which an additional export of 20,000,000 lb. of tea and 10,000 bales of silk is required. 2ndly, That if such increase of our exports hence restored the balance of trade to-morrow, the proportion in which an increased import of our goods would take place must depend upon the result of a competition of cotton goods against opium and raw cotton—all three objects in demand among the Chinese; and the proportion of each that may be taken under the assumed improvement depends upon the relative degree of preference exhibited by our customers for the different articles. The two latter have proved formidable rivals to our manufactures, nor is there any reason to anticipate beneficial change in that respect.

The argument, therefore, that the only limit to our imports into China is the consumption of tea and silk in Great Britain, if meant to be applied, as it appears to be in the evidence, exclusively to British imports—that is, to cotton and woollens—is fallacious, and can only be sustained by dropping the most important features of the import trade, by treating opium and raw cotton as though they had neither existence nor influence upon our British staple trade.

The influence of this mode of reasoning is calculated to be the more mischievous that it comes from gentlemen of practical mercantile information, and purports to suggest a remedy for an evil which is, in truth, of our own creating, and must recur as often and as certainly as the same causes are in operation. The trade in China during the last three years has been a losing, and in many instances a ruinous, trade, not because the English do not drink more tea, or the Chinese do not find it convenient to wear more cotton of our manufacture, but simply because in such market the supply has not been carefully regulated by an accurate estimate of the probable demand. Our merchants at home have unfortunately been led by such reasoning as I have quoted to assume that in proportion as we purchase more tea the Chinese would lay out more money in cotton goods, and that the one might be taken as a true estimate of the other. Hence came shipments after the treaty so disproportioned to the actual wants or state of demand in the Chinese market that an immediate glut, with the consequent and necessary depreciation in price, followed. Nor did the evil end here: a return was of necessity to be made for this enormous over-supply of goods, hence more tea was shipped than the legitimate demand of the English markets would have suggested or justified, and at the other end of the chain the same depreciation and ruinous loss was experienced....

I have submitted in this and the preceding Reports my strong conviction that other conditions than a mere increase in our exports hence are essential. Of these I have endeavoured to show the principal and most important are access to the first markets, the removal of or efficient control over all fiscal pretexts for restricting the free circulation of our goods in the interior and the transit of Chinese produce thence to the ports, and, finally, the abolition of all humiliating travelling limits in the interior, which more than anything else tends to give the Chinese rulers a power of keeping up a hostile and arrogant spirit against foreigners, and of fettering our commerce by exactions and delays of the most injurious character.

The conditions of the trade were, in fact, simpler than the merchants had imagined. The Chinese entered into no nice estimates of the balance of imports and exports, but purchased the goods which were offered to them so far as they were adapted to their requirements—and there is no other rule for the guidance of foreign manufacturers in catering for the great Chinese market.