THE OUTLOOK IN CHINA.

Evening Star, Issue 20688, 10 January 1931, Page 12

THE OUTLOOK IN CHINA.

Chaotic conditions in Chinese finance are evident. Hongkong advises another serious drop in the value ol the dollar, wliich is on a silver basis. The price of this metal has been tailing lor months. Financial conditions in Hongkong provide a reliable indication of the position in China, for this lice port is an important distributing centre for (ho country's foreign trade. A report emanating from Now York suggests that an international effort wifi bo made soon to try to improve tho state of things in China, one suggestion being the advance of heavy loans of silver to the Chinese National Government and tho development of a comprehensive plan of public improvements in China under strict international supervision. Britain, Canada, tho United States, Franco, and Japan are all reported as being concerned in tho movement. There is little doubt that the countries mentioned would be willing enough to provide liuance on the lines indicated if any guarantee could be afforded of stable government in the country, for the potential trade possibilities are enormous. If the Kuomintaug, with Chiang Kai-shek at the head, could bo (irmly established as tho Government of the republic confidence would soon be restored. At tho moment the outlook is better than it has been for a long time. Fong Yu-hsiang has boon defeated; Y'on Hsi-shan, another troublesome war lord, has quitted the political stage; the war in Southern China has died down in consequence of tho defeat of most of tho Kwangsi generals; and tho Manchurian mar-

filial, Chang Ilsiich-liang, is co-opcra-fcing with Nanking. But China, since the revolution of 1912, lias resembled Vesuvius—an outburst is possible at any time. As result international confidence is much shaken. The Kuomiutaug has been awakened to the instability of its position, as it merely provides party and not representative rule. Consequently it has announced its intention of initiating rcfdrms. Tho convocation of a People’s Convention has been ordered for May 3, which is to fix the date for tho promulgation of a permanent constitution, and to which all fundamental problems are to bo submitted.

It is expected that resistance to the reforms will come from Sun Yat-seu’s die-hards in the south, and trouble may bo experienced in other directions, but there seems to be an increasing desire among the responsible Chinese of all classes that a sound constitutional edifice should bo erected. It is the taxes levied for tho maintenance of tho, military right through tho country that are throttling trade, and this taxation must continue until the hordes of soldiers are disbanded and their energies directed to the arts of peace. One thing is clear, and that is that the Kuomintang is impressed with the necessity of establishing order in tho country as a preliminary to commercial and economic rehabilitation. Whether it is strong enough to carry out its task remains to bo seen. Yielding to the force of circumstances it now declares its anxiety to work in accord with tho representatives of tho western nations, and an important meeting was held at Shanghai in November to discuss tho procedure at an international conference, which will bo summoned to consider plans for tho consolidation of the unsecured and in-adequately-secured domestic and foreign debts and other obligations of China. Tho Nanking Government’s plans may bo summarised under the following heads :—Eradication of Communism and banditry; restoration of the national finance and the enforcement of honesty in handling funds; evolution of a clean and efficient Government through the eradication of lethargy and corruption; economic development, involving an effort to obtain foreign capital on, honourable terms, and tho enforcement of district autonomy and adequate provision for schools. Expressed in the shortest way, it is an effort to bring order out of chaos. Tho world would rejoice to sec the task accomplished.