On the other hand, nothing was to be expected from private initiative or from the Government, which latter would unquestionably have vetoed any improvement, and only reluctantly permitted, on account of its political value, the creation of the telegraph-line connecting Peking with the extremities of the Empire. In 1877 the Europeans had actually to pull up the rails laid down on the short line between Shanghai and Wusung, and though the Chinese since 1889 have pretended to consider the construction of a line from Hankow to Peking, it has only been with the object of misleading the Europeans. No progress is possible in China under these unfavourable conditions, and the antiquated methods of the natives continue to hamper all commercial and financial prosperity.
The treaty of Shimonosaki, signed in 1895 at the close of the war between China and Japan, effected some very important changes in this respect, and in virtue of the most-favoured-nation clause, inserted in the treaties with the Powers, opened out a better prospect for foreigners of every nationality, who were thus able to benefit by the advantages conceded to the Japanese. Article 6 of this important document stipulated the opening of several new ports, and permits steam navigation along the coasts and up the rivers and canals leading thereunto. It goes on to declare that foreigners may visit the interior to purchase or sell merchandise, and that Japanese subjects may establish depots for the same wherever they like without paying any extra tax, and erect factories of all sorts in the Chinese open towns and ports, and import into China all kinds of machinery on payment of a fixed tariff. Goods manufactured by Japanese subjects on Chinese territory should be placed on the same footing with respect to inland and transit duties and other taxes, charges, and facilities for warehousing, etc., in the interior, as goods imported into China by other foreigners, and enjoy the same privileges.
This clause is of very great importance, since it permits the combination of highly-perfected European machinery and cheap Chinese labour in the production of articles the raw materials for which, especially silks and cotton, can be obtained in the immediate neighbourhood of the free ports. The clause above cited may appear at first somewhat extraordinary, and in any other country but China it would be superfluous to stipulate that goods manufactured in the country itself should not be treated with less consideration than similar articles imported. But the Japanese negotiators understood their men, and are perfectly aware that if they had not inserted these special clauses, the advantages obtained would have been annulled by the Chinese authorities by a system of arbitrary taxation and other vexatious measures.
No very long time elapsed before the advantages of Article 6 of the Shimonosaki Treaty were made strikingly evident. In three years’ time an entire district of Shanghai was occupied by not less than nine large cotton factories, working 290,000 spindles, which in 1898 were increased to 390,000, and close to them presently rose some thirty silk factories, which, in due time, will be considerably increased both in numbers and importance. In the other ports this industrial impulse has not yet been much felt, except at Tien-tsin, where a woollen factory has lately been established. In that great centre of industry, Shanghai, a certain falling-off has been observed in this extreme briskness, due to over-production, and also to a very legitimate desire to watch the results of industries already existing before launching into further speculations. Then, again, there was a fear that wages might presently rise to an exaggerated extent.
The labour market of China is undoubtedly enormous, but the supply does not respond as readily to the demand as in Europe, because the distances are great and the means of communication correspondingly few and difficult. However, the labourers living on the banks of the Yang-tsze, who are called ‘Water-fowls,’ constantly flock into Shanghai in search of work. They belong to that class of poor creatures who crowd the great Chinese cities, and whose only home is their sampang, in which an entire family accommodates itself in a space that would barely suffice for a single European. One can see their floating huts moored alongside the arroyos that furrow the suburbs of Shanghai. Once they begin to earn a little, they build a hut on shore, using up the material of their old boathouse, until they can erect something better by way of a dwelling. Salaries are distinctly rising in Shanghai, and when I was there in 1898 the factories were wrangling over their workmen and women—who are in the majority—in consequence of certain enterprising but unscrupulous managers of rival firms intriguing, by offers of higher wages, to induce the most skilled to leave their employers and come to them. The quality of the labour at Shanghai appears to be satisfactory, at least, so say the different managers, and in the manufactories which I visited I noticed that everything was scrupulously clean and orderly, quite as much so as in any average European or American factory of the same class. The workgirls do not live, as in Russia and Japan, and, indeed, as they did formerly in England and in other manufacturing countries, in a building near the place of business set apart for the purpose, and at the expense of the firm, but at home with their own families. Many of them are married women, and a great number, instead of leaving their little girls over ten years of age at home, request that they may be employed, so as to remain under their supervision. They are usually engaged on very light work, such as shifting the cocoons in the boiling water for the weavers. In the silk factories I visited they were allowed half an hour every day for what was known as ‘school,’ during which some senior workwoman—the mother or the elder sister—taught them the rudiments of their work. This system is excellent, and the managers declare themselves highly pleased with it, as it is likely to train good workers.
The working hours at Shanghai in the silk factories are usually from six in the morning to six in the evening, including an hour and a half for meals. In the silk manufactories the little girls earn 1¼d. per day at first, which is increased to 2½d. after a short time. A clever workwoman gets about 9d. In 1891–92 the wages in the same factory, which was then on a very small scale and under a Chinese name, were about 30 per cent. less. In the larger factories the children got 2½d. a day and the women from 6d. to 7d. During the first few months that elapsed after the signing of the Treaty of Shimonosaki salaries were on an average about 5d. As exchange has not varied much since then, the rise is very considerable. ‘The women and children now working in the better factories here,’ says the British Consul at Shanghai in his Report, 1897, ‘can now earn from 10s. to 30s. a month, which is quite a fortune for people who in the native factories rarely make more than 4s. a month, although they work hard all day!’ The same Report observes that in certain branches of industry the Chinese workwomen earn more than would the same class in Italy. The under-manager who took me round one of the Shanghai factories, a Peruvian by birth, and, I fancy, a coloured man by origin, judging from his curly hair and high cheekbones, told me that in his boyhood in Peru he had earned 2½d. a day at the same business, which is what is paid to child-workers in Shanghai.
It is, therefore, a distinct mistake to imagine that China is destined to remain the land of low salaries. Some considerable time may elapse before wages reach the high figure obtained in Europe, but there is every prospect that in the course of time a very considerable rise will take place, especially as industry improves, and the demand for skilled labour increases. The Celestials are pretty sure to look after their own interests in the matter by forming trades unions. Strikes are not unknown either in China or Japan.
These facts tend, I think, to dissipate, if not entirely, at any rate in part, the illusion about the famous ‘Yellow Peril’ which has so greatly disturbed certain worthy people. That ‘peril’ seems to me to be still remote, for, even if the people of the Far East did succeed in producing nearly all the articles which they now import from Europe, it would necessarily follow that the trade in them, being infinitely greater than it now is, would increase their profits likewise very considerably. It is equally certain that the first effect of the introduction into China of European industries must lead, as it already has done, to the bettering of the condition of the Chinese labouring class, both by augmentation of wages and consequent improvement in manner of living. If, therefore, European export trade may apparently suffer from the manufacturing of goods hitherto imported by the Chinese, such as cottons, for instance, matters will balance themselves eventually for the simple reason that, the richer the Chinese get, the more they will buy. Japan has already shown how the introduction of machinery has created a new branch of import of great value.
In order to realize these brilliant prospects, several very drastic alterations in the present position of affairs are needed. The permission, granted at the instance of Great Britain in 1898, allowing European navigation on the inland waters of China, and the concessions for the creation of railways and exploitation of mines, may subsequently lead to very remarkable results, but up to the present they have not been entirely successful. Industrial activity is still limited to the free ports and their immediate vicinity. The reasons for this state of affairs are worth examining, especially as they illustrate the determined opposition of the Chinese authorities to all measures of reform, and also indicate many points against which Europeans should complain.
The Chinese Custom-house duties were determined according to the treaties as much as possible 5 per cent. ad valorem. They may therefore be safely described as comparatively light, and are collected with great regularity for the Imperial Government on the European system by a staff admirably organized by Sir Robert Hart.