Problems of Foreign Capital in China

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AMONG the economically less-advanced areas of the world, China is peculiar in that it is not a new country awaiting the beginnings of an ordered civilization, like much of the African and South American continents; it is a country of dense population, not only with a distinctive culture and a high degree of social organization, but already possessing a very considerable industrial, commercial, and financial development of its own. Industrial enterprises, therefore, and more especially the modern means of communication such as railways and steam shipping, find in China a field already plowed and harrowed for the sowing. Once built with honesty, and operated with even a minimum of efficiency, a railroad in China pays for itself almost from the beginning. Its course lies through a region already under intensive cultivation, and through towns which immemorially have possessed local industries, whose opportunity for expansion has hitherto been limited by the enormous transportation costs incident to the old methods of conveyance by donkey, by camel, or by wheelbarrow; and within reach of it dwells a population more densely settled than in any region of the world, except perhaps some portions of northwestern Europe. A railway in China has not, therefore, to develop the country which it is to serve and from which it is thereafter to derive its revenue. The economic problem which it presents is rather one of adjustment and development, which takes place automatically as between the industries and the markets of the region which has been awaiting this quicker and cheaper means for the disposal of its products...