The China Year Book for 1919 gives the total Chinese production of coal for 1914 as 6,315,735 tons, and of iron ore at 468,938 tons.[[103]] Comparing these with Mr. Arnold's figures for 1917, namely 20,000,000 tons of coal and 500,000 tons of pig iron (not iron ore), it is evident that great progress was made during those three years, and there is every reason to think that at least the same rate of progress has been maintained. The main problem for China, however, is not rapid development, but national development. Japan is poor in minerals, and has set to work to acquire as much as possible of the mineral wealth of China. This is important to Japan, for two different reasons: first, that only industrial development can support the growing population, which cannot be induced to emigrate to Japanese possessions on the mainland; secondly, that steel is an indispensable requisite for imperialism.
The Chinese are proud of the Kiangnan dock and engineering works at Shanghai, which is a Government concern, and has proved its capacity for shipbuilding on modern lines. It built four ships of 10,000 tons each for the American Government. Mr. S.G. Cheng[[104]] says:—
For the construction of these ships, materials were mostly supplied by China, except steel, which had to be shipped from America and Europe (the steel produced in China being so limited in quantity, that after a certain amount is exported to Japan by virtue of a previous contract, little is left for home consumption).
Considering how rich China is in iron ore, this state of affairs needs explanation. The explanation is valuable to anyone who wishes to understand modern politics.
The China Year Book for 1919[[105]] (a work as little concerned with politics as Whitaker's Almanack) gives a list of the five principal iron mines in China, with some information about each. The first and most important are the Tayeh mines, worked by the Hanyehping Iron and Coal Co., Ltd., which, as the reader may remember, was the subject of the third group in the Twenty-one Demands. The total amount of ore in sight is estimated by the China Year Book at 50,000,000 tons, derived chiefly from two mines, in one of which the ore yields 65 per cent. of iron, in the other 58 to 63 per cent. The output for 1916 is given as 603,732 tons (it has been greatly increased since then). The Year Book proceeds: "Japanese capital is invested in the Company, and by the agreement between China and Japan of May 1915 [after the ultimatum which enforced the revised Twenty-one Demands], the Chinese Government undertook not to convert the Company into a State-owned concern nor to compel it to borrow money from other than Japanese sources." It should be added that there is a Japanese accountant and a Japanese technical adviser, and that pig-iron and ore, up to a specified value, must be sold to the Imperial Japanese works at much below the market price, leaving a paltry residue for sale in the open market.[[106]]
The second item in the China Year Book's list is the Tungkuan Shan mines. All that is said about these is as follows: "Tungling district on the Yangtze, 55 miles above Wuhu, Anhui province. A concession to work these mines, granted to the London and China Syndicate (British) in 1904, was surrendered in 1910 for the sum of £52,000, and the mines were transferred to a Chinese Company to be formed for their exploitation." These mines, therefore, are in Chinese hands. I do not know what their capacity is supposed to be, and in view of the price at which they were sold, it cannot be very great. The capital of the Hanyehping Co. is $20,000,000, which is considerably more than £52,000. This was the only one of the five iron mines mentioned in the Year Book which was not in Japanese hands at the time when the Year Book was published.
Next comes the Taochung Iron Mine, Anhui province. "The concession which was granted to the Sino-Japanese Industrial Development Co. will be worked by the Orient Steel Manufacturing Co. The mine is said to contain 60,000,000 tons of ore, containing 65 per cent. of pure iron. The plan of operations provides for the production of pig iron at the rate of 170,000 tons a year, a steel mill with a capacity of 100,000 tons of steel ingots a year, and a casting and forging mill to produce 75,000 tons a year."
The fourth mine is at Chinlingchen, in Shantung, "worked in conjunction with the Hengshan Colliery by the railway." I presume it is to be sold back to China along with the railway.
The fifth and last mine mentioned is the Penhsihu Mine, "one of the most promising mines in the nine mining areas in South Manchuria, where the Japanese are permitted by an exchange of Notes between the Chinese and Japanese Governments (May 25, 1915) to prospect for and operate mines. The seam of this mine extends from near Liaoyang to the neighbourhood of Penhsihu, and in size is pronounced equal to the Tayeh mine." It will be observed that this mine, also, was acquired by the Japanese as a result of the ultimatum enforcing the Twenty-one Demands. The Year Book adds: "The Japanese Navy is purchasing some of the Penhsihu output. Osaka ironworks placed an order for 15,000 tons in 1915 and the arsenal at Osaka in the same year accepted a tender for Penhsihu iron."
It will be seen from these facts that, as regards iron, the Chinese have allowed the Japanese to acquire a position of vantage from which they can only be ousted with great difficulty. Nevertheless, it is absolutely imperative that the Chinese should develop an iron and steel industry of their own on a large scale. If they do not, they cannot preserve their national independence, their own civilization, or any of the things that make them potentially of value to the world. It should be observed that the chief reason for which the Japanese desire Chinese iron is in order to be able to exploit and tyrannize over China. Confucius, I understand, says nothing about iron mines;[[107]] therefore the old-fashioned Chinese did not realize the importance of preserving them. Now that they are awake to the situation, it is almost too late. I shall come back later to the question of what can be done. For the present, let us continue our survey of facts.