# The Truth about China and Japan/Document M

APPENDIX
(M)
CHINESE GOVERNMENT TABLES AND RETURNS FOR THE YEAR ENDING JUNE 30, 1919
Explanatory Note.—The valuable tables and returns annexed hereto are from an official (unpublished) annuaire of the Peking Cabinet. Nothing like them has ever been issued.
They include:
(1) A return of the Chinese Debt Service—the most elaborate statement yet published;
(2) The administrative expenses of the Central Government, giving a calendar year's estimate (excluding provincial expenditure);
(3) A complete return of the number of troops under arms in China to-day—total, 1,290,657 men, costing the country $208,971,080 per annum.
The available income of China to-day is about $370,000,000. National Debt Service requires $120,000,000, and Administrative Expenses (central and provincial governments) at least $130,000,000 Thus only $120,000,000 a year can be spared for Army and Navy. But the known army expenditure is upwards of 208 million dollars: when Navy and Extraordinary Field expenses of the army (due to the internal struggle) are added, the annual deficit is about $130,000,000.
This has been the explanation of the borrowings from Japan. If the list of Japanese loans in 1918 is carefully checked it will be found to amount to the deficit in the Chinese Budget.
The main conclusions, however, to be drawn from all these figures and returns are (1) that China can be governed more cheaply than any country in the world, bearing in mind her four million square miles of territory and her population of upwards of four hundred millions; (2) that in spite of the bucket-shop methods of finance encouraged by foreign concessionaires China, in comparison with Europe, is to-day practically debt-free, her total unproductive debt (less the suspended Boxer indemnities), Internal and External, calling for only $120,000,000 (say £20,000,000) per annum in interest and sinking-fund, and amounting in capital-value to considerably less than one pound sterling per head of population.
Extract from Government Statement
1. Payment of National Debts.
On account of the payment of the Boxer indemnities being postponed, and the low rate of exchange of gold, the expenditure under this head for 1918 was less than usual, only amounting to $112,750,000. Out of this sum, $68,820,000 were paid for foreign loans and $43,930,000 for domestic loans. Judging from previous records, it is felt that the annual provision for this purpose will have to be increased, as the price of sterling at present is extraordinarily low, and its probable rise must be guarded against. The annual amount that will be required for meeting national indebtedness will therefore have to be increased to $120,000,000. The following tables give the list of domestic and foreign loans, including the payment of principal and interest and also the long-term foreign loans.
Domestic and Foreign Loans, Including Payment of Principal and Interest
(From July 1, 1918, to June 30, 1919)
2. Administrative Expenses.
The amount expended by the Central Government in 1918 was $79,000,000 and that by the Provinces $68,000,000. The total was $147,000,000. Based on previous records, the annual amount required, roughly, is about $140,000,000. Granting that retrenchment can be made, the minimum amount required cannot be less than $130,000,000. The following table gives the estimated administrative expenses of the Central Government (less the Provinces, which expend $68,000,000):
The Latest Estimate of Administrative Expenses of the Central Government
(From July 1, 1918, to June 30, 1919)
Extraordinary Expenditure
(3) In the preceding paragraphs, it is to be noted that the payment of national debts and administrative expenses annually amounts to some $250,000,000. If this amount is deducted from the annual ​income of $370,000,000, only a residue of $120,000,000 will be available for the support of the army and the navy. At the present time, not counting the $7,150,000, expended on the navy, the army costs the country the enormous sum of $210,000,000. It must be added that even in this amount, neither the extraordinary and additional expenses required by the army, nor the extraordinary expenditure incurred by the Southwest campaign recently, are included. As it is our object to live within our means, it is essential that we should regulate the expenditure according to the income.
The Present Number of Troops in the Country and Their Cost of Maintenance
(For the 7th Fiscal Year of the Republic)