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 is only by one-seventh inferior to it—in other words, the 50,000,000 inhabitants of Japan now deal with foreign countries at the rate of about 24 shillings per head, while the 850,000,000 inhabitants of China still deal with foreign countries only at the rate of less than 4 shillings per head.

We cannot hope for any transformation of China similar to that we have witnessed in Japan, for the ruling classes in China lack those elements of patriotism and enlightenment which alone rendered possible such an evolution as Japan has accomplished. Nevertheless, things are moving, even in China. The commercial genius of the Chinese people will not be denied, let the Mandarins hamper it as they may. The obstinate conservatism of official China cannot in the long-run keep the Chinese markets closed against the commercial enterprise of this country. That is a question merely of time and patience. The real danger that threatens it is the policy of economic exclusion based on political ascendancy, of which Russia and Germany have already given us a foretaste in Manchuria and Shantung.

I have dealt so far with various British interests which can be more or less closely reduced to terms of money. Not so, however, the interests of another and more complex order represented by the British communities that have struck root in the 'Treaty Ports' of China. Yet they constitute in many ways an Imperial asset of a still higher order. In virtue of our treaties with the Chinese Empire, British subjects have right of access for purposes of trade and residence to thirty-five towns in China, which, by an extension of an originally accurate description, are still technically designated as 'Treaty Ports, even where they are situated far inland, away both from the sea and from the great navigable rivers. Under treaty, foreigners residing in certain areas set apart as 'settlements' or 'concessions'—a distinction upon which it is needless here to enter—enjoy rights