Institute of Pacific Relations

China's Road Building Progressing RapidlySource: Far Eastern Survey, Vol. 4, No. 9 (May 8, 1935), pp. 69-70Published by: Institute of Pacific RelationsStable URL: http://www.jstor.org/stable/3022531 .

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trade of Netherlands India. Of special consequence to Germany are the development of a critical attitude in Japan toward her highly unfavorable German trade

balance, involving possible retaliation against German

goods; and, principally, the increasing difficulty of the general German trade position, intensified in recent months. It is not necessary to discuss here the details of various measures adopted by the German govern? ment to curtail imports and increase exports or the effects of such devices as exchange restrictions, elabo- rate quota systems or clearing agreements. In some

quarters it is thought that barter arrangements have been effected in individual transactions involving Ger? man and Far Eastern merchandise but definite knowl?

edge on the subject is lacking. Rumors are also heard that a clearing agreement between Germany and Japan is contemplated, but none has materialized. Their general effectiveness, it should be noted, is ques- tionable in the extreme.

Pertinent is the fact that German exports, on Ger? man figures, continue to decline against imports, and

that the difficulties of the German ex- Trade porter in general grow more severe. Promotion The blocked mark (subsidized) ex- Methods ports are now discontinued and other

subsidies, direct and indirect, have been very small. To date, they have had no material effect even in counteracting the advantage derived by exporters of other countries with depreciated curren- cies. The larger sum of 200,000,000 marks authorized in the new German budget to promote German export trade is still relatively small. In addition, it is de-

signed primarily to secure sufficient foreign exchange

to pay for materials needed in equipping the German

military machine. As such it will have no consequence for the Far Eastern trade, which does not furnish the desired commodities except, perhaps, tungsten ore from China and small quantities of hides.

At the present time, circumstances peculiarly favor- able to German trade with the Far East may be bal- anced against those peculiarly unfavorable. The con-

trolling factor in the future course of this trade, there?

fore, is the general economic situation in the East. If conditions there return to normal, some improvement in the relative German position may very possibly be seen. It is well to remember, however, that Germany's combined exports to China, Japan and Netherlands India amount, on German figures, to less than 5% (usually less than 4%) of her total exports. Such a

figure is far from justifying the assumption that Ger?

many has either the ambition or capacity to dominate the Far Eastern trade.

PRINCIPAL SOURCES: Official trade returns, annuals and year books of China, Japan, Netherlands India, Germany, Hongkong, Philippine Islands, Siam, French Indo-China, British Malaya and Man? choukuo; German Foreign Trade in 1933 and 1934, U. S. Department of Commerce, Special Circular No. 315; U. S. Commerce Reports; Chinese Economic Journal; Far Eastern Rcviezv; North China Herald; The China Critic; China Weekly Rcview; Commercial Intelligence Journal, Ottawa; Oriental Economist; Monthly Circular, Mit- subishi Economic Research Bureau; Transpacific; Japan Weekly Chronicle; Bulletin de VAgence Economique de VIndochine, Paris; C. F. Remer, Foreign Investments in China, New York, 1933; F. V. Field, Economic Handbook of the Pacific Area, New York, 1934; S. Uyehara, Indus? try and Trade of Japan, London, 1926; K. Yamasaki and G. Ogawa, The Effect of the World War Upon the Com? merce and Trade of Japan. New Haven, 1929; D. K. Lieu, Foreign Investments in China, Shanghai, 1931; New York Times.

SIGNIFICANT DEVELOPMENTS

CHINA'S ROAD BUILDING PROGRESSING RAPIDLY

Some 5,100 miles of roads were constructed or sur- faced in 1934 in the provinces of Kiangsu, Chekiang, Anhwei, Kiangsi, Hupeh, Hunan and Fukien alone, according to the Chinese National Economic Council. These figures reflect the activity in highway construc? tion which has been in progress since 1929.

The movement for building roads suitable for auto- mobile transport dates from about 1920. According to a study prepared by A. Viola Smith, American Trade Commissioner in Shanghai, the chief forces which gave an impetus to the movement were the foreign con- cessions in the treaty ports, the International Famine Relief Commission, the Good Roads Association, the

provincial, military and civil governors, and private bus-line interests. Between 1921 and 1933, the Relief Commission built over 3,000 miles of roads.

The Peking Government never got beyond the stage of paper plans, but the Nanking Government has done

a great deal to stimulate highway construction. A na? tional highway system was considered desirable in order to stimulate economic development and to assist in consolidating the administrative system of the

country, as well as to aid in national defense. Previous efforts at road-building by provincial authorities had often resulted in waste and lack of coordination. In

January 1929 the Ministry of Railways organized a National Highway Planning Commission, and in co-

operation with provincial representatives drew up a

plan for a national system of highways. It called for the building of 22,000 miles of roads over a period of 20 years. These roads were to serve the most populous districts and chief commercial centers, to act as feeders to the railways, and to connect with existing or pro- jected provincial lines. A further step was taken in

June 1932 with the creation by the National Economic Council of a Bureau of Public Roads, which was to

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supervise the linking up of existing roads into a con- nected system. Two programs were laid out, the first

covering Chekiang, Kiangsu and Anhwei, and the sec? ond including these provinces together with Honan, Hupeh, Kiangsi and Hunan. Funds provided by the National Government were loaned to the provincial authorities, generally to the amount of 30 to 40% of the total cost of construction. From May 1931 to

April 1934, $3,982,000 (Chinese) was loaned by the National Economic Council for this purpose. Many of the provincial governments and military rulers have taken the initiative in building roads, sometimes out of a desire to promote the public welfare, sometimes from motives of personal profit or military strategy.

The results of these efforts appear in the rapid growth of road mileage in China since 1929. In that

year, there were only 21,400 miles of roads; but by 1933 the number had grown to 55,400, exclusive of Manchuria. Most of these, though not all, are found in the coast provinces and those of the Yangtsze Val-

ley. Shantung leads with 14,800 miles, Kwangtung is second with 4,900, and Szechuan third with 2,900. Dirt roads predominate, though some are surfaced with crushed stone and gravel.

As a corollary of the extension and improvement of

highways, the number of motor vehicles in China has

grown from 8,200 in 1921 to 26,000 in 1929 and 39,000 in 1932. The China Year Book for 1934 estimates the number (excluding Manchuria) at 38,000. About two thirds of these are passenger cars, which are, however, largely confined to the great cities. There are some 5,000 trucks and about the same number of buses. All of these are imported, as no automobiles are manufactured in China, and an overwhelming pro-

portion of both passenger and other ears comes from the United States.

According to Trade Commissioner Smith, there is a

tendency for "provincial authorities themselves to op? erate or to grant franchises to private bus line com?

panies for the exclusive use of given roads . . . The

right to operate motor ears over China's newly con? structed roads is still chiefly reserved to Government officials or to bus line interests. . . . Whatever expan? sion may come in the automobile field in China will

undoubtedly be confined for several years to that of motor trucks for bus transportation service rather than for privately owned vehicles."

The inadequacy of railway facilities in many parts of China, and the difficulty of securing capital for

railway building, have furnished arguments for the

good roads movement. But the problem is compli- cated. The newest roads have cost, on an average, about $9,600 (Chinese) a mile, whereas even a narrow-

gauge railway costs around $19,000 a mile. On the other hand, the Bureau of Roads has estimated that the transport of freight by truck costs from 25 to 52 cents per ton-kilometer, while railway charges for simi? lar freight would be only from 9 to 17 cents. There is also the question of fuel: coal for the railways is produced at home, but gasoline for motor ears must be largely imported. Again, roads suitable for heavy trucks are comparatively costly, while those for carts and pack animals are cheap but progress over them is slow. The League of Nations' Committee on Technical Cooperation with China has indicated that the form of transport most desirable for one region may not be the same as that for another, and has recommended careful study of the types of roads and vehicles best adapted to the needs of different areas.

JAPAN SEEKING FURTHER SAKHALIN OIL CONCESSIONS

With the removal of the C. E. R. issue, the question of the North Sakhalin oil concession is now coming to the fore as one of the important economic issues between Japan and the Soviet Union. For some time, the North Sakhalin Petroleum Company has been con-

ducting negotiations with the Soviet Government in the hope of gaining an extension of the prospecting concession which expires in 1936.

By the terms of the 1925 agreement, a forty-five year concession was granted to Japanese companies for the exploitation of one half of the oil fields already established on the northern part of Sakhalin Island, and also there was granted an eleven year concession for prospecting an additional forty-three square miles of territory. If oil fields were established as the result of this exploratory work, Japan was to have the right to exploit one half of such fields.

The North Sakhalin Petroleum Company has not been successful in its negotiations for an extension of

this prospecting right, and in February of this year it was reported that the company had determined to

complete the prospecting by the end of the period and that five wells would be bored in the coming business

year, commencing in April. The matter has since

passed into the hands of the Japanese Foreign Office. It is understood that the negotiations will be conducted in conjunction with those for the renewal of the fishery treaty which also expires in 1936.

The exploitation concession, which has still thirty- five more years to run has proved very valuable to the Japanese and the work of the company has been active. Production figures have increased from

120,000 barrels in 1925-26 to 1,875,000 barrels in 1932-33. Reservoirs have been built capable of stor-

ing a year's production of oil and pipe lines have been

laid, one of which runs from the reservoir out into the

sea, so that oil can be piped directly into a ship at

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