a tax on inland trade levied while in transit from one district to another. It was originally a war tax imposed as a temporary measure to meet the military expenditure required by the T‘aip‘ing and Mahommedan rebellions of 1850-1870. It is now one of the permanent sources of income, but at the same time it is in form as objectionable as a tax can be, and is equally obnoxious to the native and to the foreign merchant. Tolls or barriers are erected at frequent intervals along all the principal routes of trade, whether by land or water, and a small levy is made at each on every conceivable article of commerce. The individual levy is small, but over a long transit it may amount to 15 or 20%. The objectionable feature is the frequent stoppages with overhauling of cargo and consequent delays. By treaty, foreign goods may commute all transit dues for a single payment of one-half the import tariff duty, but this stipulation is but indifferently observed. It must also be remembered, per contra, that dishonest foreign merchants will take out passes to cover native-owned goods. The difficulty in securing due observance of treaty rights lies in the fact that the likin revenue is claimed by the provincial authorities, and the transit dues when commuted belong to the central government, so that the former are interested in opposing the commutation by every means in their power. As a further means of neutralizing the commutation they have devised a new form of impost, viz. a terminal tax which is levied on the goods after the termination of the transit. The amount and frequency of likin taxation are fixed by provincial legislation—that is, by a proclamation of the governor. The levy is authorized in general terms by an imperial decree, but all details are left to the local authorities. The yield of this tax is estimated at taels 13,000,000 (£l,950,000), a sum which probably represents one-third of what is actually paid by the merchants, the balance being costs of collection.
4. Imperial Maritime Customs.—The maritime customs is the one department of finance in China which is managed with probity and honesty, and this it owes to the fact that it is worked under foreign control. It collects all the duties leviable under the treaties on the foreign trade of China, and also all duties on the coasting trade so far as carried on by vessels of foreign build, whether Chinese or foreign owned. It does not control the trade in native craft, the so-called junk trade, the duties on which are still levied by the native custom-house officials. By arrangement between the British and Chinese governments the foreign customs levy at the port of entry a likin on Indian opium of taels 80 per chest, in addition to the tariff duty of taels 30. This levy frees the opium from any further duty on transit into the interior. The revenue of the maritime customs rose from taels 8,200,000 in 1865 to taels 35,111,000 in 1905.
5. Native Customs,—The administration of the native customs continues to be similar to what prevailed in the maritime customs before the introduction of foreign supervision. Each collector is constituted a farmer, bound to account for a fixed minimum sum, but practically at liberty to retain all he may collect over and above. If he returns more he may claim certain honorary rewards as for extra diligence, but he generally manages to make out his accounts so as to show a small surplus, and no more. Only imperfect and fragmentary returns of the native collectorates have been published, but the total revenue accruing to the Chinese government from this source did not appear up to 1900 much to exceed two million taels (£300,000). In November 1901 native customs offices within 15 m. of a treaty port were placed under the control of the maritime customs, their revenues having been hypothecated for the service of the Boxer indemnity. The result was that the amount of the native customs collected by the commissioners of customs increased from taels 2,206,000 in 1902 to taels 3,699,000 in 1906.
6. Duty on Native Opium.—The collection of the duty on opium is in the hands of the provincial officials, but they are required to rendera separate account of duty and likin collected on the drug, and to hold the sum at the disposal of the board of revenue at Peking. The annual import into China of Indian opium used to amount to about 50,000 chests, the exact amount of opium imported in 1904 being 54,750 piculs, on which the Chinese government received from duty and likin combined about 5½ million taels (£825,000). The total amount of native-grown opium was estimated in 1901 at about 400,000 chests (53,000,000 ℔), and if this were taxed at taels 60 per chest, which in proportion to its price was a similar rate to that levied on Indian opium, it should give a revenue of 24 million taels. Compared with this the sums actually levied, or at least returned by the local officials as levied, were insignificant. The returns gave a total levy for all the eighteen provinces of only taels 2,200,000 (£330,000). The anti-opium smoking campaign initiated by the Chinese government in 1905 affected the revenue both by the decreased importation of the drug and the decrease in the area under poppy cultivation in China. In 1908 the opium likin revenue had fallen to taels 3,800,000.
7. Miscellaneous.—Besides the main and regular sources of income, the provincial officials levy sums which must in the aggregate amount to a very large figure, but which hardly find a place in the returns. The principal are land transfer fees, pawnbrokers’ and other licences, duties on reed flats, commutation of corvée and personal services, &c. The fee on land transfers is 3%, and it could be shown, from a calculation based on the extent and value of the arable land and the probable number of sales, that this item alone ought to yield an annual return of between one and two millions sterling. Practically the whole of this is absorbed in office expenses. Under this heading should also be included certain items which though not deemed part of the regular revenue, have been so often resorted to that they cannot be left out of account. These are the sums derived from sale of office or of brevet rank, and the subscriptions and benevolences which under one plea or another the government succeeds in levying from the wealthy. Excluding these, the government is always ready to receive subscriptions, rewarding the donor with a grant of official rank entitling him to wear the appropriate “button.” The right is much sought after, and indeed there are very few Chinamen of any standing that are not thus decorated, for not only does the button confer social standing, but it gives the wearer certain very substantial advantages in case he should come into contact with the law courts. The minimum price for the lowest grade is taels 120 (£18), and more of course for higher grades. The proceeds of these sales go directly to the Peking government, and do not as a rule figure in the provincial returns. The total of the miscellaneous items accruing for the benefit of the government is estimated at taels 5,500,000.
Expenditure.—In regard to expenditure a distinction has to be drawn between that portion of the revenue which is controlled by the central government, and that controlled by the several provincial authorities. As the provinces collect the revenue, and as the authorities there are held responsible for the peace, order and good government of their respective territories, it follows that the necessary expenses of the provinces form a sort of first charge on the revenue. (As the tables given show, the provinces spend the greater part of the revenue collected.) The board of revenue at Peking, which is charged with a general supervision of finance matters all over the empire, makes up at the end of the year a general estimate of the funds that will be required for imperial purposes during the ensuing year, and apportions the amount among the several provinces and the several collectorates in each province. The estimate is submitted to the emperor, and, when sanctioned, instructions are sent to all the viceroys and governors in that sense, who, in turn, pass them on to their subordinate officers. In ordinary times these demands do not materially vary from year to year, and long practice has created a sort of equilibrium between imperial and provincial demands. The remittances to the capital are, as a rule, forwarded with reasonable regularity, mostly in the form of hard cash. There is, however, a constant pull going on between Peking and the provinces—the former always asking for more, the latter resisting and pleading impecuniosity, yet generally able to find the amounts required. The expenses which the central government has to meet are:—(1) Imperial household; (2) pay of the Manchu garrison in and about Peking; (3) costs of the civil administration in the capital; (4) cost of the army so far as the expenses are not borne by the provinces; (5) naval expenses; (6) foreign loans—interest and sinking fund. To meet all these charges the Peking government for several years up to 1900 drew on the provinces for about taels 20,000,000 (£3,000,000), including the value of the tribute rice, which goes to the support of the Manchu bannermen. No estimates are furnished of the sums allowed under such heading. The imperial household appears to receive in silver about taels 1,500,000 (£225,000) but it draws besides large supplies in kind from the provinces, e.g. silks and satins from the imperial factories at Su-chow and Hangchow, porcelain from the Kiang-si potteries, &c., the cost of which is defrayed by the provinces. The imperial government has also at its disposal the revenue of the foreign customs. Prior to the Chino-Japanese war of 1894-95 this revenue, which, after allowing for the costs of collection, amounted to about 20,000,000 taels (£3,000,000), was nominally shared with the provinces in the proportion of four-tenths and six-tenths. The whole of the customs revenue is now pledged to foreign bondholders and absorbed by the service of the several loans. Besides supplying its own wants the imperial government has to provide for outlying portions of the empire which are unable to maintain themselves—(1) Manchuria, (2) Kan-suh and the central Asian dominion, (3) the south-western provinces of Yun-nan, Kwei-chow and Kwang-si. Manchuria, or, as it is termed, the north-east frontier defence, costs about taels 2,000,000 over and above its own resources. The central Asian territories constitute a drain on the imperial government of about taels 4,000,000 a year. This is met by subsidies from Sze-ch‘uen, Shan-si, Ho-nan and other wealthy provinces. Yun-nan, Kwei-chow and Kwang-si require aids aggregating taels 2,000,000 to keep things going.
External Debt.—Prior to the war with Japan in 1894 the foreign debt of China was almost nil. A few trifling loans had been contracted at 7 and 8%, but they had been punctually paid off, and only a fraction of one remained. The expenses of the war, however, and the large indemnity of taels 230,000,000 (£34,500,000) which Japan exacted, forced China for the first time into the European market as a serious borrower. The sum of £6,635,000 was raised in 1894-1895 in four small loans at 6 or 7% interest. In 1895 a
- Information as to what extent the expenses of the new army and navy are met by the central government is lacking.
- To meet the expenditure on interest and redemption of the indemnities for the Boxer outrages the Peking government required the provincial authorities to increase their annual remittances by taels 18,700,000 during the years 1902-1910.