The Chinese are proud of the Kiangnan dock and engineering works at Shanghai, which is a Government concern, and has proved its capacity for shipbuilding on modern lines.  It built four ships of 10,000 tons each for the American Government.  Mr. S.G.  Cheng[104] says:—­

For the construction of these ships, materials were mostly supplied by China, except steel, which had to be shipped from America and Europe (the steel produced in China being so limited in quantity, that after a certain amount is exported to Japan by virtue of a previous contract, little is left for home consumption).

Considering how rich China is in iron ore, this state of affairs needs explanation.  The explanation is valuable to anyone who wishes to understand modern politics.

The China Year Book for 1919[105] (a work as little concerned with politics as Whitaker’s Almanack) gives a list of the five principal iron mines in China, with some information about each.  The first and most important are the Tayeh mines, worked by the Hanyehping Iron and Coal Co., Ltd., which, as the reader may remember, was the subject of the third group in the Twenty-one Demands.  The total amount of ore in sight is estimated by the China Year Book at 50,000,000 tons, derived chiefly from two mines, in one of which the ore yields 65 per cent. of iron, in the other 58 to 63 per cent.  The output for 1916 is given as 603,732 tons (it has been greatly increased since then).  The Year Book proceeds:  “Japanese capital is invested in the Company, and by the agreement between China and Japan of May 1915 [after the ultimatum which enforced the revised Twenty-one Demands], the Chinese Government undertook not to convert the Company into a State-owned concern nor to compel it to borrow money from other than Japanese sources.”  It should be added that there is a Japanese accountant and a Japanese technical adviser, and that pig-iron and ore, up to a specified value, must be sold to the Imperial Japanese works at much below the market price, leaving a paltry residue for sale in the open market.[106]

The second item in the China Year Book’s list is the Tungkuan Shan mines.  All that is said about these is as follows:  “Tungling district on the Yangtze, 55 miles above Wuhu, Anhui province.  A concession to work these mines, granted to the London and China Syndicate (British) in 1904, was surrendered in 1910 for the sum of L52,000, and the mines were transferred to a Chinese Company to be formed for their exploitation.”  These mines, therefore, are in Chinese hands.  I do not know what their capacity is supposed to be, and in view of the price at which they were sold, it cannot be very great.  The capital of the Hanyehping Co. is $20,000,000, which is considerably more than L52,000.  This was the only one of the five iron mines mentioned in the Year Book which was not in Japanese hands at the time when the Year Book was published.