FAR EASTERN WAR

Evening Post, Volume CXXVIII, Issue 16, 19 July 1939, Page 6

FAR EASTERN WAR

EFFECT ON TEA TRADE

AMBITIONS OF JAPANESE

Nervousness in the world markets of the tea trade has been caused by fears that Japan will usurp China's position in the field, writes Arthur Scholes from Hong Kong to the "Chicago Tribune." This would mark a significant development in the history of the commercial production of tea.

P. E. Witham, who has been employed by the Chinese Government for seme time as a technical adviser for lea, has been in Hong Kong recently and through him some interesting facts about the tea markets have come to light. Witham was attached r-o the Chinese Foreign Trade Commission. He recalled that years ago practically all tea drunk abroad went from China. Just 100 years ago India began commercial production of tea in Assam. Ceylon joined in and later the Dutch East Indies and the East African countries:

Japan grew tea hundreds of years ago, but it was only in recent .years that it began to export it both from Japan and Formosa. Development of modern methods of tea planting tiad serious consequences for the Chinatrade, which fell behind considerably. In 1937 China exported 89,634,0001b of tea, against 382.249,9161b from Ceylon, and 173,597,0001b from the Dutch East Indies.

RECOVERING LOST GROUND.

Just before the outbreak oi the present Chinese-Japanese war the Chinese Government took steps to improve its tea industry to regain some of the lost ground. Japanese competition in particular had become acute, especially in the North African green tea market and the markets for cheaper black teas used in London for blending purposes. The war curtailed some of the plans to achieve this improvement, although work has been maintained in spite of great difficulties.

The majority of China's tea districts lie in inaccessible and mountainous regions where communications in the best of times are difficult. Unlike the industry in India, Ceylon, Java, and Africa, where tea is grown on plantations under close supervision of expert Europeans assisted by a trained labour force, China's tea is grown in small patches, each plot owned by a farmer who also grows other crops. The farmer sells his tea to various merchants and eventually the finished product reaches the foreign merchant firms for export abroad.

These circumstances naturally are subject to disruption in war time and one of the chief problems has been that of transportation from the teaproducing areas to Hong Kong, which replaced Shanghai as the centre. of the China tea market. The 1938 black tea crop, however, was brought to Hong Kong successfully before the closing of the Hankow-Canton railroad upon the fall of these two cities, and green teas also were centred in Hong Kong.

Figures show that, for the period January 1 to September 30, 1938, China tea exports were 65,620.0001b, as against 66,766,0001b for the same period in 1937. Japanese exports showed a decrease also over the same period from 34,852,0001b "in 1937 to 21,643,0001b in 1938. v There is every reason to believe that-the final figures for the whole of 1938 -will show a slight inci-ease over 1937 for China, v It has been said that Japan intends in the future to exploit the. China tea industry. At the moment, however, it has not gained possession. of any of the tea districts,. Although two small areas, one in south-west Hupeh Province and the other in north-west Kiangsi, nominally are behind the Japanese lines, these areas are not in fact under Japanese control, being in the mountains.

Further, the expert tea makers no longer are in these districts and the Japanese have not the necessary technical knowledge to produce highgrade teas. If they propose to produce tea along the same lines as in Japan, possibly using machinery, these teas will lose the essential Chinese characteristics for which they are sold abroad, Chinese say. Japan, however, may endeavour to induce Chinese tea merchants to carry on either under Japanese or puppet Government protection.

Should Japan gain complete control, upon winning the war, it would mean that Japan herself would market the Chinese tea and the old foreign firms would be driven out of business. It seems more likely for the moment Japan will attempt to induce some of the Chinese tea merchants to carry on their trade under Japanese protection, at the same time making an intensive drive to push its own tea abroad at China's expense. One such effort in 1938 led to disaster, owing to the inferiority of the Japanese tea exported to London.