Among Korean exports, which chiefly consist of beans, fish (dried manure), cow-hides, ginseng, paper, rice, and seaweed, there are none which are likely to find a market elsewhere than in China and Japan, but Korea, so far as rice goes, is on the way to become the granary of the latter country, her export in 1890 having reached the value of £271,000.

With imports, European countries, India, and America are concerned. Without, I think, being over sanguine, I anticipate a time when, with improved roads, railroads, and enlightenment, together with security for the earnings of labor from official and patrician exactions, the Korean will have no further occasion for protecting himself by an appearance of squalid poverty, and when he will become on a largely increased scale a consumer as well as a producer, and will surround himself with comforts and luxuries of foreign manufacture, as his brethren are already doing under the happier rule of Russia. Under the improved conditions which it is reasonable to expect, I should not be surprised if the value of the Foreign Trade of Korea were to reach £10,000,000 in another quarter of a century, and the share which England is to have of it is an important question.

Our great competitor in the Korean markets is Japan, and we have to deal not only with a rival within twenty hours of Korean shores, and with nearly a monopoly of the carrying trade, but with the most nimble-witted, adaptive, persevering, and pushing people of our day. It is inevitable that British hardware and miscellaneous articles must be ousted by the products of Japanese cheaper labor, and that the Japanese will continue to supply the increasing demand for scissors, knives, matches, needles, hoes, grass knives, soap, perfumes, kerosene lamps, iron cooking-pots, nails, and the like, but the loss of the trade in cotton piece goods would be a serious matter, and the possibility of it has to be faced.

The value of the import trade in 1896 was £708,461 as against £875,816 for 1895 (an exceptional year), and the larger part of this reduction took place in articles of British manufacture, the decrease of £134,304 in the value of cotton imports falling almost entirely on cottons of British origin, the Japanese import not only retaining its position in spite of adverse circumstances, but showing a slight increase. Japanese sheetings showed a substantial increase, more than counterbalanced by the diminished import of the British and American article, and Japanese cotton yarn continued to arrive in larger quantities, and is gradually driving British and Indian yarn out of the Korean market. It can be sold at a considerably lower price than the British article, and practically at the same price as the Indian, with which its improved quality enables it to compete on very favorable terms.

As the result of inquiries carried on during my two journeys in the interior, as well as at the treaty ports, it does not appear to me that Japanese success is even chiefly caused by proximity, and in 1896 she had to compete with the enterprise and energy of the Chinese, who, having returned after the war to the benefits of British protection, were pushing the distribution of Manchester goods imported from Shanghai.

Rather I am inclined to think that the success of our rival is mainly due to causes which I have seen in operation in Persia and Central Asia as well as in Korea, and which embrace not only imperfect knowledge of the tastes and needs of customers, but the neglect to act upon information supplied by consular and diplomatic agents, a groovy adherence to British methods of manufacture, and the ignoring of native desires as to colors, patterns, and the widths and makes which suit native clothing and treatment, and the size of bales best suited to native methods of transport. I do not allude to the charge ofttimes made against our manufacturers of supplying inferior cottons, because I have never seen any indications of its correctness, nor have I heard any complaints on the subject either in Korea or China, but of the ignoring of the requirements of customers there is no doubt. It is everywhere a grievance and source of loss, and is likely to lose us the prospective advantages of the Korean market.

The Japanese success, putting the advantages of proximity aside, is, I believe, mainly due to the accuracy of the information obtained by their keen-witted agents, who have visited all the towns and villages in Korea, and to the carefulness with which their manufacturers are studying the tastes and requirements of the Korean market. Their goods reach the shore in manageable bales, which do not require to be adapted after arrival to the minute Korean pony, and their price, width, length, and texture commend them to the Korean consumer. The Japanese understand that cotton 18 inches wide is the only cotton from which Korean garments can be fashioned without very considerable waste, and they supply the market with it; and on the report of the agents of the importing firms, the weavers of Osaka and other manufacturing towns with adroitness and rapidity closely adapted the texture, width, and length of their cottons to those of the hand-loom cotton goods made in South Korea, which are deservedly popular for their durability, and have succeeded not only in producing an imitation of Korean cotton cloth, which stands the pounding and beating of Korean washing, but one which actually deceives the Korean weavers themselves as to its origin, and which has won great popularity with the Korean women. If Korea is to be a British market in the future, the lost ground must be recovered by working on Japanese lines, which are the lines of commercial common sense.

To sum up, I venture to express the opinion that the circumstances of the large population of Korea are destined to gradual improvement with the aid of either Japan or Russia, that foreign trade must increase more or less steadily with increased buying powers and improved means of transport, and that the amount which falls to the share of Great Britain will depend largely upon whether British manufacturers are willing or not to adapt their goods to Korean tastes and convenience.

As instances of the aptitude of the Koreans for taking to foreign articles which suit their needs, it may be mentioned, on the authority of a report from the British Consul-General to the British Foreign Office on Trade and Finance in Korea for 1896, presented to Parliament July, 1897, that the import of lucifer matches reached the figure of £11,386,[49] while that of American and Russian kerosene exceeded £36,000.

In 1896 the export of gold increased, and was $1,390,412, one million dollars’ worth being exported from Wön-san alone. The gold export included, the excess of Korean imports over exports was only about £50,000, and as it is estimated that only one half of the gold actually leaving the country is declared, it may be assumed that Korea is able to pay for a larger supply of foreign goods than she has hitherto taken. The statistics of Korean Foreign Trade which are to be found in the Appendix are the latest returns, supplied to me by the courtesy of the Korean Customs’ Department,[50] the returns of shipping and of principal articles of export and import being taken from H.B.M.’s Consul-General’s Report for 1896, presented to Parliament July, 1897.[51] With reference to the shipping returns, it must be observed that the British flag is practically unrepresented in Korean waters, even a chartered British steamer being rarely seen. The monopoly of the carrying trade which Japan has enjoyed has only lately been broken into by the establishment of a Russian subsidized line as a competitor.