MONTHLY BULLETIN NO. 19, DEPARTMENT OF ECONOMIC AND POLITICAL SCIENCES, AURORA UNIVERSITY.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00926A006900050002-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 96
• Document Creation Date: December 14, 2016
• Document Release Date: August 3, 2001
• Sequence Number: 2
• Publication Date: February 16, 1954
• Content Type: REPORT

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COBFIDEDPTIAL
CENTRAL INTELLIGENCE AGENCY
INFORMATION REPORT
China
Monthly Bulletin No. 19, De9artment of Economics and
Political Sciences, Aurora University.
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(BY SOURCE)
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. .. ?
THIS IS UNEVALUATED INFORMATION
DOCUMENTARY
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SUPP. TO
REPORT NO.
fAvailable on loan from the CIA Libra/7 is a photostatic copy a:Monthly
Pulletin No, 19) dated June and July 43, prapared by the Deportment. of
Economics and Political Sciences, Aurora, University, Shanghai. Chapter
? titles are as follows:
Analysis of the Patent Law.
Activities of the Farmers' Bank since the Victory.
Cigarette Industry in Shanghai and Tobacco Problems in China.
The Rubber Industry in China.
ANNEX
Rules Governing the Application of the Revenue Stamp Duty Law.
Commodity Tax Regulations.
Regulations Governing Application for Registering Profit-seeking
Enterprises and Business Offices of Members of Liberal Professions.
Rules Governing the Collection of the Business Licence Tnx in Shanghai .7
, -end -
UttARY 8UJECT ac AREA
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UNIVERSITE L'AUNORE
-Shanghai-
BUREAU DE D0CU4ENTATI0N
(Economie Chinoise;
.....
280 Chungk!.ng an Lu (Dubail)
Te1.85761
Cigarette-Industry in Shanghai STUDY NO.: XVII
and Tobacco Problems in China. Number of?pages: 12
Articles and reports digedted and combined
in this Study:
"Ministry of Agriculture & Forestry to Increase Tobacco
6 Production", Shang Pao, May 17, 1947.
"The Shaken-up Cigarette Industry", by Chi Ch'ung-wei, .
Ta Hung Pao, June 24, 1947.
"The Heuch'ang Tobacco", by Wang Chi-ping, Aug. 4, 1947.
"The Crisis of Cigarette Manufacturing and Policy
Required", by Chao Chu-chi, the Economic Semi-Monthly
of the Hopeh Provincial Bank, Aug. 16, 1947.
"Past and Present Conditions of China's Cigarette
Industry", by Chen Yih, the Economics Weekly, .
Aug. 21, 1947.
"A Study on China's Tobacco Export', by Chang I-pin,
the Economics geekly, Oct. 24, 1947.
"Abundant Output of American Tobacco in Kweichow", Sin
Wen Pao, Oct. 27, 1947.
(Continued in the note on page 12)
CIGARETTE INDUSTRY IN SHANGHAI
, AND TOBACCO PROBLEMS IN CHINA.
Since the introduction of the first cigarette
making machine into this country (1891) cigarette manufacture has
gradually become the third in importance among Chinese light
industries, next to textile and flour milling. To-day, the num-
ber of workers employed directly in the production of cigarettes
'approximates to 100,000 and that of tobacco farmers to 2,000,00CJ.
Since the War, cigarette making in the whole of
China is said to average 250,000 cases of 50,000's per month, an
increase of about 30% pver the pre-war output of 190,000 cases
(including Manchuria) 1): On the other hand, the national
NOTE.: 1) Chen Yih: "Past and Present Conditions of China's
Cigarette Industry" (The Foonomics Weekly, August
21, 1947.
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m
consumption, according to an estikate which apPeared in Shang Pao,
May 17, 1947, requires a minimum of 2,000,000 oases yearly. .
From the fiscal point of view, this industry pro- ?
vides important revenue as both cigarettes and domestic tobacco
leaf are taxed, at 100/.. and 30 respectively, by the Government.
In 1947, for example, a sum of CA41,591,323,272,228 (excluding
Manchuria) was collected from the levy on a total of 2,082,698
cases of cigarettes alone.
According to lhe tax collection offices the numbe2
of cigarette factories operating to-day throughout the country is
over seven hundred 1).
Northeastern Provinces :
Liaoning-Antung 14
Kirin-Liaopei 2
North China :
Central and Oest China :
Chungking 41
Szechuan-Sikang 26
Kiangsi 4
Hupeh 28
Tientsin
19
Tsingtao
4
at China :
Shantung
27
Shanghai 2)
71
Shensi
13
Eiangsu
31
Shansi-SuiYuan
?4
Chekiang
42
Hopeh-Jehol-Chahar
5
Anhwei
67
Henan
150
South China :
Kwangtung
50
Kwangei
28
?
'Fukien
17
YUnnan-KWeichow
32
The above table, however, tells very little about
the real situation of the cigarette industry in China. Most of
the factories recorded are small enterprises Where cigarettes are
hand-rolled and supplied for local consumption only. As in other
industries in China the cigarette industry is concentrated in
Shanghai which really furnishes :the supplies for the national
consumption.
I. - The Yee TscJdngTobacco Compoby.
EXcept the lee soong, Tobacco Company, formerly
the British American Tobaccodo 119.,/1arge-sca1e cigarette fac-
tories are few in Shanghai, the majority being of medium or small
size. Altogether they possess only 625 cigarette-making machines
with a total output of 130,000 cases of 50,000 cigarettes per month
as recorded for March 1948. Since April the production has dropped
to 60,000 cases owing to the sharp decline of outport demand which
NOTES: 1) parr, ran. April 7, 1948.
2) There are 105 member factories in the Cigarette Manufac-
turers, Guild in Shanghai according to -"Cigarette
Industry in Shanghai", Chin Yung Jih Pao, April 12, 1948.
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started a year ago especially in North China: the monthly sales
to the Peiping-Tientsin area during 'Vie months of March and April
in 1'47 were ef some 30,000 cases; but less than 3,000 cases
monthly are being sold there to-day as reported by the local Ta
Kung Pao 1).
The The Tsoong Tobacco Company leads in production
a$ Well as distribution, with well-equipped faCtoribs located not
only in Sh.ahghai but alao in the principal Chinese cities.
Yee Tsoong Factories (before 1943)
Regions
Cities Companies Controlled
No.of
No. Of Ciga-
by Yee Tsoong
FtY.
rette Making
.hi nes
-%
gE
Fengtlien
Chi Tung Tobacco Co.
1
Yingkcw
C1-I. Tung Tobacco Co.
1
81
Harbin
"Lao Pa To" Tobacco Co.
1
30
N. China
Tientsin
Yee Tsoong Tobacco Co.-
1
98
Tsingtao
- do -
1
74
C. China
Shanghai
Tobacco Produots Corp.
2
Yee Tsoong Tobacco Co.
1
173
Hankow
- de -
2
90
S. China
Hongkong
- do -
1
20
TOTAL
11
566
With the above equipment Yee Tsoong alone ?Quid
easily furnish 56,600,000,000 cigarettes yearly or 60% of the
total annual output in China 2). The distribution of Yee Tsoong
cigarettes covers also the whole country by a network of distri-
buting companies controlled by the Yee Tsoong. $ the Yee Tsonng
Tobacco Distributors, Ltd., the ding Tai Wo Tobacco Company and
the Chi Tung Tobacco Company, each of which enjoys exclusive
selling rights in a specified region with a great number of
"special agents.' and "special wholesale agents" as sub-distributors.
The cigarette output in the whole of China in
1947 was 2,082,698 eases, an increase of 60% over the 1,260,000
cages produced in 1946. In Shanghai the Yee Tsoong factories
reached the following figures as compared with the Chinese fac-
tories during the. last two years:
1946 Output (case) Cammodity Tax (CNiT)
Shanghai 854,128 174,090,020,500
Yee Tsoong & T.P.O. 123,773(14.5%) 35,209,473,200(20.2%)
1947
Shanghai 1,398,890 1,309,119,245,600
Yee Tsoong & T.P.C. 246,132(17.59;Z) 371,670,711,800(28.39%)
NOM: 1) Re: Bankers' WecIrly, Vol.XXXII No.22 dated May 31, 1948,
page 40.
2) Cf. Shah Liang : "A Study on the British American
Tobacco Trust in China", in Chung YangJih Pao, Shanghai
Edition, June 2, 1947 issue.
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Since June 1947, when the working system was rea-
tored to 6 days per week, the output of Yee Teoong factories in
Shanghai has reached about 30,000 cases monthly. On the contrary,
the Chinese factories have had to face a downward trend since
April 1947.
It is often argued that three main factors among
many actually favour the position of the Yee Tsoong Tobacco Company.
1/ The restrictions affecting imports of ciga-
rettes since November 1946 have given rise to an increasing demand
for the Yee Tsoong brands, which are comparatively less costly than
the imported cigarettes. The imported products, mostly of American
make, are blended oigarettes which the majority of Chinese do not
prefer while the Yee Tsoong cigarettes are made to their taste, and
were popular with theL. long before the tar.
ii/ AS the sui)ply of domestic tobacco is limite:
by the civil war the Chinese factories have to rely on foreign
supply?which is undertaken by the import merchants and indirectly
augments the cost of production. Such difficulties are lessened
for Yes Teoong since importation is directly made by the Company.
iii/ The Yee Tsoong is in a better position to
produce than any of the Chinese factories on account of its huge
capital and it is easier for it to obtain credits and raw mater-
ials than for the Chinese factories.
II. - Chinese Companies Manufacturing Cigarettes.
Among the many Chinese companies only a few de-
serve a special mention.
1. The China Tobacco Cemrsanv, a government
enterprise under the Ministry of Economic Affaird, comprises three
main factories taken over from the Japanese after V-J Day. Its
output varies between 8,000 and 10,000 eases monthly, which shows
a considerable increaae over its 1946 output of 55,336 eases.
The "Marshall", "All Six" and "Compass" enjoy a good market .
throughout the country; one-fourth of them are sold in Shanghai
and the rest in the following regions: Hupeh, Eastern Chekiang,
districts along the Shanghai-Nanking and the Shanghai-Hangchow
rallWays; Hunan, Anhwei, Honan, Shensi, Eansu, Teingtao, Saechuan,
EWeiyang and Yunnan. The assets of this company appraised in the
early months of 1947 were said to reach CN438,000,000,000.
2. The Hwa Ching Tobaqco Company %established
in 1924) used to produce 20,000 cases monthly before the War, wiz;
is issuing 6,000 cases to-day. One-third of its ").Ly Dear" and
"Golden Rat" are sold in Shanghai and two-thirds in the outporta,
mainly in the districts along the Shanghai-Hangchow railway and
also in Hankow, Hsuchow (N. Eiangsu),..Tientsin and Canton.
3. the Nanyana Brothers Tobacco Comsany
(established in 1906) was before the War the leading cigarette
factory under Chinese ownership, with a monthly output'of 18,00O
cases. To-day only 2,000 cases are produced per month of which
25% are 691d locally and 715,% to outports..mainly districts along
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the 'Shanghai-Nanking and Shanghai-Hangchow railways, Xwangtung,
Fukien, Lanchow and Sian. Besides .he Shanghai factory, there are
others in Chungking, Hankow and Canton. Their produotion is
comparatively small as they are hindered by shortage of raw mater-
ials and equipment, Tho '"Banker", "Golden Dragon", "White Dragon",
'Pearls", "Seven Stars" and "Sword" are Nanyang products.
4. The_Ta Tung Nan Tobacco Company (established
in 1925) has a daily output of 200 cases of "Brandy" cigarettes ICA
with a fifty-fifty market in Shanghai and in the outports. The
"Brandies" Eire made from ,unerioan leaves (70Z) and flue-cured
tobacco (30;1) and are very popular in the distriets along the
Shanghai-Nanking and Shanghai-Hangchow railways, the river ports
along the Yangtze, North Kiangsu and North China.
5. De nin Hwa Tobacoo Company (established in
1944) is a "big business organization" among the small-scale cigar-
rette factories in Shanghai. Tho present output is 200 cases per
day which if necessary can be increased to 300. The "Coffee"
cigarettes, the only brand produced by Chin Hwa, are made especialls
for outport consumption and have a good reputation similar to thA
"Pirates" and "Ruby (amens", both Yee Teoong products. The
"Coffee" used to have a wide market in the Northeastern Provinces
but to-day they are confined to Peiping, Tientsin and Tsinan in
the north; Nanking and Hankow along the Yangtze; Sian, Lanchow ane
Tihwa in the Northwestern Provinces. The local market takes up
only one-twentieth of the whole output of this company.
. 6. The Chung Mei Tobacco Company (established in
1946) produces 200 cases per day and has a good market outside
Shanghai. The present output is 170 cases daily of which 257, are
sold in Shanghai. "Three Stars", "Ingot" and "Black label" are
products of this company.
7. The Hwa Eing Tobacco Company (established
in 1942) used to produce more than a dozen kinds of cigarettes.
To-day, the "Million Dollars" are specially made for sale in
Shanghai, the "Conklin" for North Elangsu, and the "Indian" and
"Blue Crusade" for other regions, with sub-distributing offices
_located in Nanking, North Kiangsu, Tientsin, Hangchow, Hankow and
FUkien.
8. The Forward Tobacco gat, 14td., established
near the end of the War, has a daily output of 100 cases mainly of
"White Horse", "4hite Horse, Magnum" and a small proportion of
"Forward" cigarettes. These cigarettes are popular in both the
looal and outport markets.
9. The Ta Chung Hwa Tobacco Company (established
in 1946) has a maximum production of 90 cases per day. The
".ores" has a good market both in Shanghai and at Xiukiang and
Nanch,ang in Niangsi. The tobacco of Hauch,ang (Nonan) is mainly
used in the ".Sores", as well as in the "Horse Shoe" and "Incense
"Burner".
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III. - Main Problems Facing The
Cigarette industry.
50002-1
Despite the fact that imported cigarettes 1) have
an important position on the local market, they do not constitute
an important threat to the manufacturers, whose customers are in
the interior oities and villages. Cigarettes imported into China
are centered in Shanghai; only a relatively small quantity is re-
distributed to a few other Chinese cities.
There are many difficulties affecting the Chinese
industries as a whole under the prevailing abnormal conditions and
the cigarette business is no exception. The rain ones are sum-
marized as follows:
The market already narrowed by civil war is again
threatened by strong competition among the cigarette factories
especially in such a time of inertia on the market. Since credit
is not, obtainable from the Government banks and since recourse to
private loans would mean an abnormally high rate of interest, there
is nothing left for the cio.rette factories but to sell their pro-
ducts at a low price in order to obtain a much needed working capi-
tal. The reduction in price then affects the whole market through
a very unsound competition..
On the other hand, shortage of raw materials is
a very actual problem to the cigarette factories, as marcrof them
rely largely on imported tobacco to maintain production. American
tobacco is used in the making of quality cigarettes but the supply
is insufficient to meet the detand on account of import restric-
tions. The domestic tobacco of American origin, which we shall
deal with later on., cannot supply enough for the Shanghai fac-
tories on account again of the civil. war. Under the prevailing
Destriction import quotas for 1947 and for the 5th and 6th quarters
in 1948 are shown as follows:
let.
2nd.
3rd.
4th.
5th.
::;uarter
quarter
cuarter
,Zuarter
& 6th, 1
Quarters
Feb.- Apr. '47)
May - July '47)
Aug. - Oct. '47)
Nov.,47-Jan.'48)
Feb. - July '48)
US$8,000,000
8,000,000
5,000,000
5,000,000
8,000,000
Approx. quantity
of Tobacco 0'),
tamable (4 US$
0.50 per lb.)
16,000,000 lbs.
16,000,000 lbs.
10,000,000 lbs.
10000,000 lbs.
15,000;000 lbs.
TOTAL , U504,000,000 68,000,000 lbs.
Affected by the limited supply of tobacco and the
restricted market, many of the Chinese cigarette factories have
had to reduce their production and take up something more
NOTE: 1) The imn2trttion of cigarettes has been prohibited since
Nov. 1946. ftor, :?04,-.-11v gold in China come either
from previous stocks ox tnroUb ugU ng.
-
?
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luorative than cigarette manufacturing - the hoarding of tobacco.
This new trend has given rise to suslension of night shifts or
temporary closing down under the pretext of machinery renovation
and caused many cases of labour disputes in 1947.
Although China is self-sufficient in tin flOil 1),
cigarette paper has to be imported in order to cover the shortage.
The Min Feng Paper Aill in Shanghai, now producing 30,000 bobbins
of 4.000-metres 9er month, has installed another machine which will
bring its prod:lotion up to 60,000 when some parts still lacking have
arrived. Aaantime, it is estimated that 190,0C:0 bobbins will still
have to be imported monthly to supply for the cona:leption of the
entire country 2). The actual import of cigarette paper during
the past two years is given as follows according tn the Chinese
Mariti,e Customs:
1946
CHINA 4,240.172 Kgs. (1,557,557 bobbins)
Shanghai 3,974,188 Kgs. (1,459,852 bobbins)
1947
3)
CHINA 3,258,059 Kgs. p.,196,794 bobbins)
ai
Shangh 2,892,990 Kgs. 1,062,692 bobbins)
These imports came mostly from tIZA which sent 4,091,282 Age. and
2,668,969 Kgs. into this country in 1946 and 1947 respectively.
French products supplied 115,041 Kgs. in 1946 and 167,440 Kgs. in
1947. Under the barter system cigarette paper delivered by the
Japanese up to December 1947 totalled 2,125 cases of 40 bobbins
each, according to the United Credit Information Bureau. Accordinc,
to the Customs records a total 9f 256,646 Kgs. was :imported from
Japan in 1947.
- American Seed Tobacco.
Although China is known as one of the leading
tobacco growing countries not only is her output insuffioient for
tomestic consumption, but a great deal of her leaf is unfit for
cigarette manufacturing. In the following paragraph tobacco for
native-style smoking is not consioered and only the flue-cured
American type tobacco is referred to.
NOUS: 1) Local production of tin foil as investigated by the
Industrial & Commercial Guidanee Bureau and published
in the National Journal of Commerce (Sept. 1947 issue)
is sufficient to supply the cigarette industry of the
whole country with a monthly output of 20,000 cases.
2) From other sources it is learned that Ain Peng oontemr
plates another plant at Hangohow (Chekiang) to produce
another 30,000 bobbins monthly. This woUld reduce the
needed import to 160,000 bobbins.
3) The average weight of a 4,000-metre bobbin is 6 lbs.
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261,050
---
Plantation of American seed tobacco is mainly
centered in three rrovinces, namely, in 6hantun7, (Tsingchow), in
Honan (Heuch'ang) and in Anhwei (Pengp'uj.
During the der, plantation of American seed
to-
aeco was taken up in Yunnan with great success as far as qua'..ity is
concerned. Recently Kweiting, scutheast of Kweiyang (Kweichbw):
has starte0 producing tobacco which mellows well, with a leaf very
similar to that of Kentucky. The Nanhsiung leaf produced in
riwangtuhg is Of inferior quality compared to others previously ml.nt-
ioned. 'd
The 1946 :x.cop for the whole of China totalled
95,000,0:30 lbs, which when ,processed into "flue-cured" tobacco,
corresponds to not more than 6000l00 cases of cigarettes.
The 1947 crop of flue-cured leaf tobacco was
expected to total 13C,000,000 lbs., still some 50% short of the
nation's requirement. The output of Shantung, Honan and Anhwei
in 1946 and the estimated crop (including Yunnan) for 1947 are
shown as followe:
Pre-war Annual Output
1946 Output
Estimated .;rn
for 1947
Shantung
125,000,000 lbs.
20,000,000 lbs.
25,000,000 lbs.
Bonen
50,000,000
60,000000
70,000,00C-
Anhwei
30,000,000
8,000,000
30,000,000
Yunnan
-
6,000,000
The tobacco shortage is further illustrated in
another report given by the United Credit Information Bureau 2)
which revealed that the present output of flue-cured tobacco
is approximately 140,000,000 lbs. against a demand of 250,000,000
lbs. for the cigarette making machines'in operaticm to-day in this
country. The shortage would reach 210,000,000 lbs., if full
operation of all the machines was resumed.
dith such insuffiaient crops eubetantial quantities
of imports will continually be required if the level of China's
consumption is to be maintained, But such imports depend upon the
availability bf foreign exchange and on tho import control policy
of the Government, and,as previously stated, the quotas are being
curtailed by the Import-EXport Board.
With a view to satisfying China's requirements, a
special organ, the Bureau of Tobacco Improvement, was created by the
Ministry of Agriculture and Forestry in the early part of 1u47.
This Bureau, dealing mainly with the increase of tobacco production,
handles also matters concerning improvement and conservation of
seed, methods of planting, prevention of insect diseases, methcds
of tobacco curing and research concerning marketing.
NOTES: 1) Despite this fact a certain "Universal Tobacco Company"
of USA has planned to put up a cigarette manufacturing
plant in Kwangtung, the )(goal Sin Wen Pao (Feb. 2, 1918)
reported. TM., would use the Nanhpi"ra
exolusively, improving the r1 -,L.,..... u,,A3r th.a
direction of the U.T.C.
2) Chin Yung Jih Pao, M'ay 7, 1948.
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A six-year .clae: dawn up by the Bureau, sets the
goal of self-suffieiency te be att.ai.ned in two periods: The fi:.st
aims at bringing the crops )f S1ien'aleg, Honan and Anhwei to
250,000,000 lbs. witrie the first four years, and the second, for
the remaining two year;, eelms at further bringing the output of
Honan, Shantung; Anhwei, Yunnan, Kweichow, Szechuan, Taiwan and
the Northeastern Provinces ti 350,000,000 lbs.
programme also includes the experimental .1
improvement of the quality of the tobacco seed, but increase or
production is nevertheless the primary necessity. Owing to the
widespread civil warfere in Shantung and Bonen, the centre of dev-
elopment has shifter from thee provinces to Anhwei.
V. - Present Conditions by Provinces.
1. Anhwei: The climatic cend4tions in North
Anhwei are especially favourable to plantation 1) of American 3eed
tobacco. Under the Bureau of Tobacco Improvement, P'engpu, Fens-
yang, Tihgyuan, Huaiyuen, Lingpi and Chiashan have been chosen
principal development and promotion districts. The tobacco fields
cover some 260,000 mow (I mow = 6.744 ares) with a total crop -.:?
500,000 tan (3 tan = 60.478 Kgs) of good quality leaf, of which
the "FU Kwang", of Virginian origin, is the best known. The num-
ber of curing chambers as reported by Shang Pao (June 4, 19484
reachee 17,000.
Seeds distributed to the principal districts:
Acreage (mow)
Seeds (shih chin)
2)
Plengpu 5,362 54
Fengyang 30,634 '310
Tingyuan 32,770 330
Nuaiyuan 16,817 175
Lingpi 32,006 325
Chiashan 8,007 83
Development ereas of secondary importance include
8zuhsien, WW1?, Hech'iu, Fengt'ai, Shouhsien and FUyang covering
a possible area of 128,328 mow wtth 13,055 shih chin availeble
for distribution.
A model tobacco centre has been created at T'ang-
chiahu, in the viernitymot_Angpe, where experiments will be
carried out by the Anhwg/DeV6opment Station. Meantime, technical
advice as well as free distribution of chemical fertilizers (the
latter depending on appropriation by the Ministry of Agriculture
and Forestry) are being sponsored by the Station to bring about an
increase of tobacco production in this province.
IOUS: 1) Anhwei soil, however is usnally considered too heavy to
give very eatisfactcry results.
2) One shih chin = 0,50 Kg. or 1.102 lbs.
MONTIEW.BULLETIN NO.XIX - June?Jerly 1948 - STUDY XVII - Page 9
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Besides agricultUral loans, the Ft:timers' Bank of
China also makes "tobacso production loans". The amount of IThe
latter issUeld,in 4inhwili has reached CN$140,000,0004000 as reported
by Shand tad (Mb 4, 1948)e. '
2. Mere it not buoh to be said
regarding the plantation of tobacco in thib piovinee, :Adopt that
150,000 mow of land will be planted this year adeotding to the
project of the Bureau of Tobacco Improvement. Sinee thd fall of
Hsuchtang, distributing and collecting centre of Honan flue-cured
tobaeco, the condition of the plantations is unknown. Neverthelesl,
the area planted in 1947 was expected to increase by 20-30% the
656,000 mow cultivated in 1946 whose output reached 921,000 shih
tan (1 ehih tan = 100 ehih chin), or 75% of its prewar level. 2)
3. Shantung: According to the Chin Yung Jib Pao,
May 5, the development of Americem seed tobacoo for the year 1948
has already been decided by the Department of Reconstruction of
the Shantung Provincial Government and the Farmers' Bank of China
on an area of 285,000 mdw with an expected crop of 712,500 tan.
The project however includes districts recently fa/len to the
Communists:
Distyicts
Anil (mow)
35,000
30,000
30,000
50,000
35,000
30,000
40,000
30,000
25,000
285,000
Bcnected Crop (tan)
Weihsien
Anchliu
Cheangle
Shoukuang
(Ts'ingehow)
Lineh'u
Iintzu
HUantlai'
Chlangshan
TOTAL
175,:gg
75,000
75,000
8
7,600
75,000
100,000
75.000
62,500
712,500
Loans for the promotion will be made jointly by the
Department of Reconstruction, the Bureau of Tobacco Improvement
and the Farmero' Bank in the following manner:
ler Producti_pn:
-.Fertilizer loans 0 0N#300,000 per mow C1485,500,000,000
For ?rocessinms
Coal loans (for curing) D ON$250,000 71,250,000,000
per mow
TOTAL 0N$16, 750,000,000
Prom the same report it is learned that the seed
conservation centre of Lintsu, olosed since the Japanese invasion,
will be reopened thie year under the joint auspiaeil of the School
of Agriculture of the University of Shantung and the North China
NOTES: 1) Cf. MONTHLY BULLETIN Np.V. (Feb. 1447), Doeument
"Honan Flue-Cured Tobacco in 1946' byPleng Mao-i.
?
2)Shang Pao, June 11, 19,47..
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Breeding Station. An area of 150 mow will be used this year to grow
3,000 chin of high quality seed for future distribution. In another
report of the Chin Yung Jih Pao May 7, 1948 it was disclosed that
only 100,000 mow of tobacco will be planted this year by the Bureau
of Tobacco Improvement in Shantung, with a loan of CN$119,000,000,000
to be granted by the Farmers' Bank of China.
. 4. Kweichow: The output of Kweichow leaf of
American origin is estimated to have reached 35,000,000 chin in
1947, during which year a large quantity of Kweichow tobacco was
sent to Shanghai and Hankow. The sudden demand for this type of
tobacco in the above mentioned cities was merely caused by the
ihott supply of Honan and Shantung tobaccos. The development of
Kweichow tobacco this year, according to the project of the Bureau
of Tobacco Improvement, aims at 50,000 mow.
5. IlAntga: the pidtaation.ot American seed
tobacco was introducalifto Vdtalan id 1948 with,01 initial area of
2,727.85 mow. In 1947, the total area reached ,5,302 bow with an
estimated crop, according to the Department of Reconstruction of
the Yunnan Provincial Government, of 133,000 tan of tobacco (approx.
17,730,000 lbs.). 1) According to the Chin Yung Jih Pao, May 25.
1948, the Department of Reconstruction of the Yunnan Provincial
Government has decided to plant 100,000 mow in 1948 providing suf-
ficient quantity Of tobacco seeds for distribution. The Department
of Reconstruction, however, estimates that the 1948 crop should
reach about. 300,000 mow owing to the increased cultivation by
individual farmers, attracted by the good profit obtained during
the preceding years. This additional plantation may deteriorate
the quality of Yunnan tobacco since the seed to be used by these
farmers has been gathered from last year's crop without any author-
itative supervision of the authorities, and is very much adulterated.
On the other hand, proper government supervision is impossible as
there are only a few specialists available in this province. The
supply of chemical fertilizers is also insuffisient and rape-seed
cake, commonly used in Yunnan, often either causes red spots rrn
the leaf or makes the leaf grow thiok and of a deep colour un-
bleachable during the drying process.
The extension of tobacco plantation might also
threaten, to a certain extent, the producti,n of food crops in
Yunnan. A reduction has already been remarked in Yuch,i, Ch'eng-
chiang, Chiangchluan, K'aiyuan and Huaning where tobaseo is
densely cultivate0a
The transportation problem remains one of the
chief difficulties for the tobacco farmers of Yunnan: 95% of their
products depend upon marketing outside the province. The high cost
of freight implies that the Yunnan tobacco will have difficulty in
coating on the Shanghai market with that produced in Taiwan,
NOTE: 1) other estimataa from authoritative sources put the 1947
crops of Yunnan leaf at about 6,000,000 lbs. only.
?
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KWeichow and Kiangei. The situation maY have become even worse
When American tobacco derived from the China Aid Programme is to
be allocated.
It is reported, however, that Yee Tsoong is
planning to establish-a cigarette factory in Yunnan, Only Yunnan
leaf would be used to make cigarettes destined for Southwestern
China,
End',
r
NOTES. "Articles and reports...." continued.
0A Perspective of the Cigarette Industry", Sin Wen Pas,
February 2, 1948.
"Geographical Distribution of Tobacco in China", by /V
Heush-hei, the Farmers' Bank Monthly, February 29, 1948.
"Cigarette Industry in China with Shanghai as Leading
,Centre", Shang Pao, April 7, 1948.
"Cigarette Industry in Shanghai", by Huang Yuan, Chin
Yung Jib Pao, April 12, 1948.
'"Promotion of Tobacco Plantation in Shantung", Chin Yung
Jih Pao, May 5, 1948.
"Plan to Increase Tobacco Production Laid Mown by the
Ministry of Agriculture and Forestry", Chin "Yung Jib
Pao, May 7; 1948.
"Marketing of Yunnan Tobacco Difficult in spite of Good
Production", Chin Yung jih Pao, May 25, 1948.
"Tobacco Plantation Promoted in Uorth Anhwei", Shang
Pao, June 4, 1948.
(Other. articles are mentioned in
the notes of the present study.)
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11111111
UNIVERSITE L'AURORE
SHANGHAI
BUR-1-AuDE DeCtMENT13100.
((CON01010 CH11001110)
280 CHUNGKING NAN LU IDUNIAIL1
TEL 08701
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?
UN1VERSITE L'AURORE
SHANGHAI
FACULTE DE DROIT
SECTION OKI SCIENCES
POLITIOUES ET ECONOMIOUES
If
BUREAU DE DOCUMENTATION
IECONOIKIE CHINOISE)
500 CHUNGKING NAN LU
TEL. 15711
ONTHLY BULLETIN
A. BOWCHON
M. THORNTON
44 SUNG CHIA-HUAI
MICHAEL W.Y.LEE
JOHN T.S. CHEN
E. S. de BREWERY
Mean of the Department of Economics
and Political Sciences
Editor
Advisory Board ,
Dean of the Faculty of?
Mean of the Department traiciorogy-
Professor of Chinese Civil law
Research Assistant. Bureau de Documentation
Research Assistant.. Bureau de Documentation
SECOND YEAR NO.= - June-July 1948
Contents
DOCUMENT NOS,
101. Analysis of the Patent Law. ?
102. Activities of the Farmers' Bank since the Victory.
STUDY NOS.
XVII. Cigarette 14ustry in Shanghai and Tobacco Problems in
China.
XVIII. The Rubber Industry in China.
ANNEXSOS.
LVII. Rules Governing the Application of the Revenue Stamp
Duty Law-,
LVI/I. Commodity Tar Regulations.
LIX. Regulations Governing Application for Registering
Profit-seeking Enterprises and Business Offices of
MMmbtre of Liberal Professions.
Rules Governing the Collection of the Business Licence
Tax in Shanghai.
?
TO OUR READERR
As the "Bureau de Documentation" will be closed
for two months during the University Vacation, the next number of
the MONTHLY BULLETIN will appear only on the 20th of SEPTEMBER.
'
SEE PAGES II & III for five important notes.
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1.
IT
EDITOR'S NTES
ON THal iNCOLIE TAX LA4 re-Yised and promulgated by the National
Government on the 1st of April 1948 ;see Mcnthly Bulletin Nos.
XVII & XVIII - April & May 1949 - Annexes L & LIII).
The revised text of Article len mentioned in the
Note on P.5 of Annex LIII was promulgated by the National govern-
ment on May 14th 1948 (cf. Weekly Review of Laws, June 9th 1948).
2. ON THE CaZMODITY TAX 7t2G1JLATIONS revised and promulgated by the
National Government on the 2nd of April 1948 (see Annex LVTIT
in this issue).
A revision of Article 14 was promulgated by the
National Government on May lth 1943, the revised text being
as.follows (cf. Weekly Review of Laws, June 9th 1948):
"The Fa Huan fines and r:onfiscation provided fcr
in the preceding three Articles as well as the closing dcu,n of
business mentioned in the preceding Article shall be enfc::cei
by court ruling.
"An appeal may be filed either by the commodity
taX office or by the person under eentence within five days '
after service of the above-mentioned ruling. But no further
appeal may be made."
3. ON THE, REVENUE STALZ DUTY Lt d revis-d and promulgated by the
National Government on the 3rd of April 1948 (see Monthly Bul-
letin No. XVIII - May 1948 - Annex LVI).
The Ministry of Finance, in its ordinance Chih III
Tzu No.84790, dated Kay 1st 1948, gave the following explana-
tory EXaMPLES in order to clarify the provisions concerning
"documents of principal debt and accessory debts" in the 3rd
paragraph in the Annotation column under item 6 "Contracts of .
Loan or Indebtedness or Deeds of Pledge" of Article 16 of the
Revenue Stamp Duty Law. (cf. Shang Pao, Shanghai, May 23rd 1948).
a) Suppose that Mr. A and Bane N conclude a Co..-
tract of Call Loan which authorises A to draw money on N up to
an amount of CN*100,000,0001 and A issues a Receipt for -Money
each time he draws any sum on N: the Contract of Call Loan will
be a Document of Principal Debt and sh1i bear revenue stamps
according to the provisions in item 6 of the Table of Duty Rates,
while the Receipts for Money, being Documents of Accessory Debt.;,
shall bear revenue stamps as provided in item 11 for Documents
for Withdrawal of Money. When 40 general Contract of Call Loan
has been signed between A and N. but the conditions of credit
and date of repayment are specified each time on the Re-spts for
Monty, then these Receipts will be csnAidered as Documents of
Principal Debt and will have tc bear revenue stamps as provided
in item 6.
. b) Debtor B draws on his Banker 0 a Timd i)raft re-
quiring a certain payment be made to Creditor C, and C requests
0 to accept the Draft. Here again two hypotheses are possible:
First, if B and 0 have previously signed a Contract of ,cceptance
authorising B to draw orders on 0 for z,cceptance, within an
agreailimit, this Contract will be a Document of Principnl Debt.
?
MONTHLY BULLETIN NO. XIX - June -July 1948 - Editor's Notes
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whereas the Draft will be only a Di:,:urent of Aeoeseory Debt.
the former being liable for the revenue stamp Anty as provided
in item 6 of the Table of Duty Rates and the letter ae.provided
in item 11. On the contrary, s no prevus Contract of Accep'-
tance has been made, then the Dray't itself, be r. a Document
of Principal Debt, will have to bear revenue stamps as provided
in item 6. In both,cases, B is responeibie for affixing the
revenue stamps, and no further affixing ,f stamps by 0 will on
necessary whenperforming the act of acceptance which merely
serves to complete the effect oft he Draft.
#
c) Mr.A, .. after.haing signcii a Contra of rin-
count with Bank P, 4ginares=1APA415tptance of :lank (%., d sendt?
it to P to be discodftedi-l-n'ThAo case, the Contract f Dis-
count will be a Doeument of Principal Debt and must herefore
bear revenue stamps as stipulated in item 6, while the Accep-
tance will be a Document of Aecesso:!y Debt, being subje.:t to
the revenue stamp duty as under item 11. But, suppose tLat,
not having signed any Contract, D directly preeents an Accep-am.,
to P for discounting: then in view of its serving as a kind
certificate of loan, the Acceptance will have tc bear revenue
stamps according to item 6.
d) Debtor E accepts a time draft which Creditor F
has drawn on hint this Trade Acceptance, serving to recognise
indebtedness, is to be considered as a Document of Prinoipal
])*bt, and the Acceptor E has to affix revenue stamps thereon
aceording to the provisions. or item 6. If F signs a Contract
of Discount with Bank R befel'e presenting the Acceptance to be
discounted, this Contract, .Jeing also a Document of Principal
Debt, shall be subject to the revenue stamp duty as provided
in item 6. But conversely if F discounts the Acceptance without
having made any contract beforehand, then new revenue stamps
will have to be affixed on the Acceptance for the new obliga-
tion established on it. (cf. Annex LVII in this issue. "Rules
govercing the Application of the Revenue Stamp Duty Law' pro-
mulgated by the Executive Yuan on the 2Gth of April 1948,
Article 14).
4. ON THE REVENUE STAMP DUTY LAN revised and promulgated by the
National Government on the 3rd of April 1948 (uee Donthly Bul-
letin No.XVIII - .zay 1948 - Annex LVI).
An error has been found in item 17 of the Table of
Duty Ratesof Article 16 (p.12 of the Annex): the amount of
VRaPTION should be "total amount less than 46,000" f.nstead of
"less than 410,000".
5. ON DOCUMENT NO.90s ?"COAL DINING AND COAL POLICY IN CHINA 1938-
1948 (CONCLUDED)" (4onthly Bulletin No.XVI - March 1948).
There it' a misprint in the -Remarks" eolums?.cn_i:11
.tho number of the Document ferming the first part of the
Article should be "821, instead of "63.
( End )
-----
MONTHLY BULLETIN NO. XIX - June-July 1948 - Editor's Notes
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F.
IV.
The MONTHLY BULLETIN is edited by the "BUREAU DE
DOCUMENTATION" of the Department of Economics and Political
Sciences, Aurora University (Shanghai).
Part of the work of the "BUREAU DE DOCUMENTATION"
is the systematic filing of all artioles in the chief Chinese
periodioals (monthly, weekly and daily) which deal with the economic
and finanoial life of the Far East. References on any subject can
be found immediately by means of a detailed card index.
The atm of the BULLETIN, which appears on the 20th.
of each month, is to put at the disposal of foreigners the economic
and financial points of view expressed in articles in the Chinese
reviews. A certain number of these articles are carefully chosen
and reproduced each month in English, either in full translation
or in the form of digests.
Each article translated or summarized is published
separately under the heading "DOCUMENT No...." so as to enable
each reader to classify them according to his personal system.
A classified index will appear at the end of each year.
Where several articles on the same subject are
written from widely divergent points of view the BULLETIN sum-
marizes these pointe Of view under the name "STUDY, NO...."
When it seems advisable the BULLETIN adds to these
Documents and Studies the translation of relevant laws or adminis-
trative acts, Whioh form "Annexes" to the Documents or Studies.
The BULAISTIN is being published to meet a definite
need and any suggestions as to the best way of meeting that need
will be welcomed.'
Though the selection, translation and summarizing
of the articles and other texts is done under the authority of the
Dean's Office of the Department of Economics and Political
Sciences, the authors, whose names appear on each Document, Study,
and Annex, are alone responsible for the statements of fact or
opinion expreceedlin them.
As regards the REPRODUCTION of translations and
digests published in the Bulletins
1. The Bureau of Documentation reserves to itself the right of
permission for the reproduction of its Documents, Studies and
Annexes, either in whole or in part, in journals or reviews
published in the Far East.
2. There is no restriction on the reproduction of articles from
the 'Bulletin in other countries, but any editor making use cf
this privilege is requested to send to the Bureau of Document-
ation a copy of the review or journal containing the reproduction.
3. Every reproduction should be breceded or followed by the
aoknowledgments "Prom the MONTHLY BULLETIN published by the
Bureau of Documentation (Chinese Economics) of Airora University,
;Shanghai".
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I.
.LIET OF CHINESE PERIODICALS
RECEIViD THA
HBUR.D.0 DE DOCUJENTATION"
(June 20th. 1048)
liMAJ2BRIA. REY.T.Ewq
Economic Development quarterly
(Kiengel)
Spinning,Wealing
(Ching Chien Chi Klan)
& Dyeing .luarterly (Fang Chih Yen Chi K'an)
Banking Information
The Central Lank of China Monthly
The Chekiang Economic Review
Chemical World .
China Industrial Development
The China Textile Review
The Commercial Bulletin
The Commercial Research Monthly
Economic Reconstruction
Tho Farmers' Bank Mmthly
The Financial Review
The HoPeh Provincial Bank Monthly
The Industry Monthly Magazine
The Juristic &Eoonomic Review
of Aurora University
The Iih Hein Monthly Review
The Native Bank Monthly
National Reconstruction
Oriental Review
The Rural Affairs gonthly
Scientific China gonthly.
11 Textile Reconstruction gontlitly
The Textile Review
The Business World
The New China Magazine
The
The
The
The
The
The
The
V.
(1"3n Hang T'ung Hein)
(Chung Yang Yin Hang Yueh Pac,
( :!.liang Ching Chi)
ttna-Hench Shih Chi eh)
(kung Xweng Chien She)
tChlien-Wei ;lung Yeh)
1 Shang Yeh Tao Pao)
Shang Hsueh Yen Chiu)
Ching Chi Chien She)
Chung Sung Yueh K'an)
Telai.Cheng P'ing Iun)
Hopeh Eheng Yin Hang Yuch K'an)
Kung Yeh Yueh K'an)
Chen Tan Fa Lu Ching Chi
Tea Chih)
'Lih Hain Yueh K'an)
Ch'ien Yeh Yueh Pao)
Chung Kuo Chien She)
Tung Fang lea Chih)
Hung Telun Yueh Klan)
Ke Hsueh Ta Chung)
Fang Chih Chien She)
Peng Chih Yen)
SEMI-MONTHLY REVIEWS
(Kling Shang T'ien Ti)
(H2in Chung Hwa)
Bankers' Weekly
Central Bank Weekly
Economics Weekly
Economic Re7iew
New Road
Textile Weekly
Weekly Review of Laws
wEBKIV IIAMLIM '
1 Yin Hang Chou Pao)
Chin Yung Chou Pao)
Ching Chi Chou Pao)
Ching Chi Ping Ian)
'loin Lu)
Fang Chih Chou Klan)
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DAILY PAPERE
Chin Yung Jih Pao - Chung Yang Jih Pao - Shang Pao - Shen Pao -
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er-
U WIVERSITE 1' AURORE
-Shanghai7
BUREAU DE DOCUMENTATION
(Economic Chinoise)
280 Chungking Nan Lu (Dubail)
Telt85761 .
Rules Governing the Collection of
11111
the Business License Tax Tri Shang1iai.4-
?
Promulgated by the Shanghai Municipal
Government (date unknown) 1);
Published in Shang Pao (Shanghai),
June 14th 1948.
Annex No.: LX
Annex concerned:
No.XXkIII.
Amber of pages:
4
Remarks: Translated by
our, Legal Department.
RULES GOVERNING THE COLLECTION OF
THE BUSINESS LICENCE TAX IN SHANGHAI
Article 1.
These Rules are laid down in conformity with the
provisions of Article 16 of the Business licence Tax Law2).
Article 2.
Besides being governed by the provielens of the
Business Licence Tax Law, the collection of the business licence
tax in this municipality shall follow the provisions of -these
Rules.
Article 3.
1) Any ens who undertakes any commereial business
within this munioipality.-shall.- aeeerding to the provisiens of
these Rules, obtain a business licence tax application form from
the Bureau of Finance which he shall fill-in fully and accurately.
Only after this has been approved, the tax paid and tke licence.
obtained, shall the business be allowed to open.
2) Any commercial business which was opened
before the enforcement of the Business licence Tax law. shall,
within the time limit prescribed by the Bureau of Pinang*, ob-
tain a certificate from its guild, submit a supplementary report,
EDITOR'S NOTES:a 1) The text of the present Rules was sent by the
Bureau of Finance of the Shanghai MUnioipality
to the Shanghai Munioipal ChaMber of Commcrce
on 'the let of June 1948.
2) The Business licence Tax Law was revised and
promulgated by the National Government on the
14th of November 190 (see Monthly Bulletin
No.XII - Nov. 3.947 - Annex XXXIII).
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make payment of the tax and obtain tha licence.
3) The Bureau of Finance shall, within one month
after receiving the application for a business lioence, either
issue the licence or give an official reply.
Article 4.
1) Tho business licence shall be renewed. once a
year, and the levy shall begin in January; if any business is
epened after July, only half the tax shall be collected.
2) Applieants for business licences shall sent
their applicstione to their own guilds to be stamped and certifiA.
Those who have not yet joined n Guild, may provisionally have them
stamped by another shop as witness; but the licenoe cannot be re-
newed without a certificate from a gu'id.
Article 5.
The business liaence tax ahall be collected ac-
tording to the scale given on the attached table.1) Capital
amounting to less than One Million Dollars, shall be exempted
from tax.
Article 6.
The amount of capital of any person engaged in
businese, shall be .determined by the following rules:
1) If the business man has genuine and legal
doeumentary evidence (such as share certificates or original
account books), the amount of capital set down in these documents
may be taken as basis.
2) If there is no documentary evidence, the amount
of capital as reported to the Bureau of Direct Taxation, shall be
taken as basis.
3) If there is no way to find out the amount of
capital reported to the Bureau of Direct Taxation, then the busi-
ness licence tax shall be collected according to the amount paid
in the preceding year applying the multiplier for the current
year; but this shall not apply if an alteration of the amount of
capital has been previously applied for and approved.
4) If the amount of the capital is tog far re-
moved from ita actual (value) or if owing to special circumstances,
it cannot be deterzlined, the case shall be forwarded for decision
to the Deliberative Committee on, Taxes and Dues.
5) If foreign merchants report their capital in
terms of foreign currency, it shall be converted into the National
Currency at thp rate determined by the Equalitation Fund Committee
at the time of reporting.
The amount of capital as mentioned above shall be
the amount of capital originally invested or the paid-up capital
plus reserves and undivided profits: "Undivided profits" means the
after the final settlement of accounts oft he year, and
after the profits have been distributed among the shareholders4
EDITOS'S NOTE: 1) See P. 4.
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whioh is carried over as undjatribizied roflt to the next half year.
Article 7.
Lf any business man operating a business, has
established different branth shops within this municipality, their
oapitala shall be kept ceparate and they shall be taxed severally
and each receive its rwn licence. If this separation cannot be
made, the principal store may report the total amount of eapital to
the collecting office in the district where it is located, and
separate licences shall be issued. Separate fees may be charged
for the cost and labour of each licence. In the owe ef brokers
and commission agents, a certificate from the guild shall be
aubmitted.
Article 8.
Only those buoinesoes which hold legitimate docu-
mentary evidence and which have been approved by the Bureau of
Finance, shall be granted a reduction or exemption according to
the Business Licence Tax Law.
Article W.
If the oaMe commercial firm concurrently manages
two or more types of business, these shall be elearly mentioned
when submitting the report. No alteration shall be made, which
has not been previously reported and approved.
Article 10.
If a business man changes the type of his business
or the name ef his shop, increases its capital, reorganises, re-
moves to another location,, or resumes his business cet takes over
the business of another person: a new application shall be neces-
sary only in the case of removal or resumption of business; in
all other cases, the original lioence together with a certificate
from the guild shall be submitted to the Bureau of Finance for
examination and approval, and then a new tax shall be paid for a
new licence. But in the case of change of the type of business,
inorease of capital or reorganisation, the amount of tax originally
paid may be deducted.
Article 11.
When a business closes down, the licence which it
has received, shall be handed over, within one month, to the Bureala
of Finance for cancellation.
Article 12.
The business licence shall be hung in a conspi-
cuous place on the business premises so that it may easily be
investigated at any time. It shall not be damaged or defaced.
If it is lost, an announcement shall immediately be made in the
newspapers; then appliration together with a certificate from the
guild or from another shop uhall be submitted to the Burgau of
Finance for examination and:forthe issue of another licence.
Article 13.
Businesd men shall, within one week after receiving
the notice of payment, make full payment of the tax; and shall
then, by presenting the certificate of payment, secure the busi-
ness licence. If payment is not made within the prescribed time
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limit, an additional payment of a Fa Huan finel) equivalent to two
tenths of the amount of '.ax payae shall be imposed for every ten
days' delay, until the del:1y 7eache5 its fiftieth day. If over
two months elapse w:Ltho..:t full payment being made, the business
shall be closed; end th overdue tax and fine shall be made good
before the business ia allowed to reopen.
Article 14.
If any business man has to close down his business
as punishment for having violated the provisions of any other law,
the business li.,ence viLich Iva has received shall immediately be
cancelled.
Article 15.
Fs Huan fines in connection with the business
licence tax shall be goverrad by the deasures governing Fiscal Fa
Huan Fines.
Article 16.
These Rules which have been laid down by the
Shanghai Municipal Government, shall be promulgated and enforced
after having been passed by the Municipal Council and submitted to
the Ministry of Finance for confirmation.
Table Showing the Scale of Amo nts of Capital
subject to the BusineL Licence Tax in Shanishal
Amount of Capital
$ 1,000,000 up to $ 2,000,000
# 2,000,000 up to 4 5,000,000
$ 5,000,000 up to $10,000,000
$10,000,000 up to .20,000,000
#20,000,000 up to $0,000,000
}ore than $0,000,000
( End
Amount of Tax Remarks
$ 3,000
# 6,000
01,5000
$30,000
$60,000
3 per mille of the
amount of. capital
EDITOR'S NOVI: 1) Th. tzi-m Fa Huan is need for a fine of a civil
character unc... idyll law, or of a fiscal cha-
racter, imp-'-d for breaches of taxation laws; in
both cases it is imposed for offences which do
not come under the penalties of the criminal law.
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Topic:
Author: Prof. Sung Chia-Huai.
PerioAioall Juristic and Economic
Review, Aurora University
(Chen Tan Fa Lu Ching
Chi Tea Chih)
UNIVERS'ITE L' A
-Shanghai
BUREAU DE DOCUMENTATION
(Economic Chinoise)
280 Chungking Nan Im (Dubai].)
Tei:8576I .
Analysis of the Patent Law.
Date of Issue:
June 1948.
U R ,0 R E-
Document No.: 101
Nature: Translation
partly abridged.
Number of pages: 25
Remarks: A part of
the original tuxt
branslated below
is still in co.es
of publication.
ANALYSIS OF THE PATENT LAW 1)
Industry is not yet highly developed in China and
inventions are few; nevertheless the patent system already has a
relatively long history in our eountry. Before the Republic was
One year old, on June 13th 1912, the Ministry of Industry and Com-
merce promulgated a Provisional Ruling on the Encouragement of
Industrial Products, which came into force on the 12th of December
following: it provided a monopoly of sales granted to the inventor
for a maximum of five years, of all products resulting from a new
invention; and a certificate cf praise granted to the author of
iaTrovements.
This ruling was revised on March 31st 1923 under
the name "Ruling on the Encouragement of Industrial Products" :
? two types of patents were recognized, one of three years' duration
and one of five.
After the inauguration of the National Government,
in June 1928, a new "Ruling on the Encouragement of Industrial
Products" was published, which recognised dour types of patent,
for fifteen years, ten years, five years and three years; but in
19-30 this was abrogated, nausing a temporary break in the patent
.eyatem. On September 30th 1932, the GOvernment published a
sPooviaional Ruling on the Encouragement of Industrial Technique"
which re-established the patent system. This was revised on April
6th 1939; a patent for new patterns and one for new designs were
added to the existing patent for new inventions. On January 6,
NOTES: 1) The Patent Law promulgated May 31, 1944, and the Rules
of Application, promulgated Sept. 24, 1947, will come
' into force on Jan. 1, 1949.
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1941, a further revision was publis:.ed which is still in force.
It is in application of the pr-visions of this Ruling that the
granting of patents is now being organised by the Ministry of Eco-
nomics and the Ministry of Industry. 1)
Besides the granting of patents according to the
Ruling on the Encouragement of Industrial Technique, already quoted,
various Ministries have published rulings for the encouragement of
the type of enterprise coming under their competence. The most
important of these are: the "Ruling on the Encouragement of Com-
positions, Inventions and 'Yorks of Art", published in 1941 by the
Ministry of Education; the "Ruling on the Setting up of a Commi-
ssion for the Reward of Jlilitary Inventions", published in 1941
by the War Office; the "Ruling on the Encouragement of.MAdical and
Pharmaceutical Technique" published by the National Bureau of
Hygiene; the "Ruling on the Collection of Works of Hydraulic Uti-
lity" published by the Water Utilisation Commission; the "Ruling
on the Encouragement of Agricultural Research", published by the
Ministry of Agriculture and Forestry; and the "Ruling on the En-
couragement of Aeronautical Industry" published by the Commission
on Aeronautics 2).
The Provisional Ruling on the Encoutagement of
Industrial Tedhnique only deals with the protection of inventions,
patterns and designs made by Chinese subjects. The first Article
expressly states that "Citizens of the Chinese Republic engaged in
research on industrial technique may, according to. the provisions
of this Ruling, apply for 'encouragement' for any of the.followings-
a) Any new invention in products or methods;
b) Any new design of practical utility in form, structure,
installation or adaptation of objects;
c) Any new pattern of aesthetic interest in the form, colour
or arrangement of objects".
Nothing is stated as to protection of inventions
made by foreigners in China.
In the older commercial treaties between China and
other countries, there was sometimes a reciprocal recognition of
patents, for example in Article 10 of the Supplementary Sino-Ameri-
can Treaty of Commerce and Navigation, of Cot. 8th 1903 s-
?The Government of the United States of America
agrees to issue a Certificate of Invention to any Chinese citizen
who has registered Ills inventions in the U.S.A., in order to safe-
guard his right to hold and utilise (these inventions). The Gov-
ernment of China hereby promises also to establish in the future
a special Bureau (Yemen) in charge of inventions, and, after this
competent Bureau (Yemen) has been erected and a epecial law gov-
erning inventions laid down, to issue Certificates of Patents to
citizens of the U.S.A. for the protection of their rights, upon
their payment of the prescribed fees, and provided that these
NOTES: 1) Of. "Chinese Economics during tHe Last Ten Years",
published by the Chung Hua Book Co., article on "Industrial
Patents in the last ten years" by :Mr. Wu Chen Lo.
2) Ibid. p. 1, Note 2.
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inventions have already securec aertaficates from the U.S.A. ; that
they do not confliat with previous ,.avartions of Chinese citizens
and that they are articles which can be legally bought and sold in
China. Each will be only for, a arescribed number of years, this
being always the same as for Patents grantec to Chinese citizens".
Although the above text has not been reproduced
in many other commercial treaties, foreigners cf other countries
can apply for patents in China by invoking the 'Lost favoured
nation' clause-.
At first the Shanahaa Customs dealt with the
question of application for patents by foreigners; then,in 1923,
the former Peking Jinistry of AGricalture and Commerce authorised
foteigners to declare theJr inventions there; and in 1927 a "Raling
on the Provisional Registration of Foreign Patents" was promulgated.
Since the formation of the National Government the drawing up of
a Ruling on Patents applicable to national and foreigners alike has
often been proposed, and such a ruling was actually planned; hut
the Ruling on the Encouragement of Industrial Technique, aucted
above, which was promulgated and came into force on Sept. 30, 1932,
is still dominated by the idea f protection and gives the right
of application for patents only to the Chinese 1).
It was only with the promulgation of the Patent
Law of 1944 that the right to apply for patents was extended to
foreigners. According to Article 14 of this Law s "Any application
for a patent made in the Republic of China by a foreigner, on the
basis of a treaty for the reciprocal protection of patents shall be
made unitrthe present Law".
In the new Sino-American Commercial Treaty of
1946, the reciprocal protection of patents was again provided for
in Article 9 -
"Nationals, corporations and associations of
either High Contracting Party shall be accorded within the terri-
tory of the other High Contracting Party effective protection in
the exclusive use of inventions; trade-marks, and trade names,
upon compliance with the relevant laws and regulations, if any,
respecting registration and other formalities which are or may
hereafter be enforced by the duly constituted authorities; un-
authorized manufacture, use or asa.e of such inventions, or imita-
tion or falsification; of such trade marks and trade names, shall
be prohibited, and effective remedy therefor shall be provided by
civil action... .In any case, the nationals, corporations and
associations of either High Contracting Party shall enjoy, through-
out the territories of the other High Contractink Party, all rights
and privileges of whatever nature in regard to copyrights, patents,
trademarks, trade names, and ther literary, artistic and indus-
trial property, upon compliance with the relevant laws and regula-
tione, if any, respecting registration and other formalities
NOTE: .1) The Lew on Trademarks, prcrulaated on Zny 6th 1930, alread.
provided for the protection of foreign trade marks..
Article.5 states that - "Foreigners who in virtue of a
treaty providing reciprocal protection of trademarks,
wish to acquire an exclusive right to the use of their
trademarks, must apply for their registration according.
to the provisions of this Law".
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which are or may hereafter be enforced by the duly constituted au-
thorities, ueon terms no less faveere'e.:.e then are or may here-t:
be aceorded to the nationals, cerporazier.s and associations of ihe
other High Contracting Party, end, in regard to eatents, trademeeee,
trade names and other induslxiel eroperty, upon terms no leas favour-
able than are or may hereafter ,a eceerded to the nationals, corr-
orations and associations of any third country".
On Sept. 24, 194/, the Governaent promulgated
"Rillep for the application of the Patent Law', and it was decided
that the Law and the Rules chculd come into force on January 1st
1949.
?
With regard to the duration of patents, undee tLe
Peking Government the DIF.XiMilln wee five years. according to the
Rules of 1928 it was fifteen years. Under the Rules of 1932, s%'11
in force, patents for inventions eant for ten years, those for
designs for three or five yearn end thcee fr%' new pateerns for
years.- When the Patent Law comes into force ie 1949, the duree*-71
of the patents for new inventions will be fifteen years. (ereecle
6 ? II of the Law). Therefore at the present moment only the :.-
tents for inventions granted during the last ten years are velidi
the others are obsolete and have become public propprty.
During the last ten years only 160 patents have
been granted for inventions; that is, an average of 16 per year.
There have been only 8 patents granted fo-.: new patterns; the laegest
number is 410 for the patents for new designs, but as the conditioel
for obtaining these are much wider' than for patents fcr inventions,
they are relatively easy to obtain.- In any case 410 is not a very
oonsiderable figure and gives an. average of only 41 per year.
Before the Law on Patent was drawn up, the Zinietry
of Economics appointed a Research Conadssion to collect the laws of
all other countries on patents and all relevant books of reference
in order to study and collate 'hen A questionnaire was also pre-
pared on ten important points concerning patents and scientifin
titutions and specialists were asked to give their opinions. In
this way the new Law was based not only on the existing laws in
other oountries but also on the special conditions existing in Chine:
it was a very thoroughly prepared document.
Where the Provisional Ruling on the Encouragement
of Industrial Techrique - hereinafter referred to as the Provjeional
Ruling',- combined in the same articles previsions common to in-
ventions, designs and patterns, .:he Law on Patents - henceforth
briefly described as 'the Law' - devotes a aeparate chapter to
each, which greatly clarifies the presentation, 4e shall therefcre
follow the provisions of the Law, discussing first inventions, tnea
designs and finally patterns 1).
I. - inventions.
Meaninm of the Term !nvention, and applisatiee
for /latent.
NOTE: 1) In translating the various areicles cf the Patent Law
quoted in thie Article, we have 'in general followed '.1-1-1
text of the tranelation of the British Charaier of Com-
merce in Shanghai.
--
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1. Definiticn; -
The Chinece 10W-slater makes no attempt to define
the term invention, knowing WC. sny such attempt would be loomed
to failure. He simply refers to the concept accepted by jurists
and by the legislations of all criuntries, a concept which tends to
be everywhere the same, with occasional variants of detail..
"Invention" before the Law means no more +.herefore than what is
universally recognised as such. But the Law aids two qualifica-
tions if the invention is to be patentable : it must be new and
it must have industrial value. This coincides more or less with
the desoription "new and useful" giv-In in the American Law (R-
vised Statutes of the United States). It is well to note that
these two qualifications, "nea" ard "of industrial va3ue" are thou:-
selves not susceptible of exa:t definition 1).
The Law is satified therefore with the laying-. :!owL
of certain negative conditions whose presence prevents an inven-
tion from being new or from possessing industrial veaue.
A. -'Negative conditions against the
liovelty of an invention.
According to Article 2 of the Law, an invention
is not new in any of the following cases : -
i/ If "prior cx the application it has appeared
in print or has been publicly used in China, so that imitation by
others is possible; but this shall not apply if it has been made
publio or used only for purposes of research or experiment and if
application for a patent is made within six months of its being
so published or used for the first time". The Law does not go
into detail concerning the publication in print nor mention whe-
ther this refers to publication in China or abroad; according to
a literal interpretation of the text all publication, whether in
China or abroad, is included. With regard to usage, it must be
used in China euld in a public manner, so that even public usage
abroad, though it "makes imitation by others possible", does not
prevent the invention from being patented. It is impossible how-
ever, absolutely. to forbid an inventor to publish or publicly use
his invention with a view to making it practical or to improving
it before applying for a patent. Such publication or use is
therefore allowed "for purposes of research or experiment", with
the restriction that "application for a patent must be made within
six months of such publication or use."
ii/ If a "patent has previously been granted on
similar invention". It is clear that any invention which has
already been patented cannot be new.
NOTE: 1) As soon as the Chinese jurists begin to comment on the
Law, they will certainly propose definitions both for the
term 'invention, and for the two qualifying expressions:
but these definitions will be borrowed from the foreign
legislation or the text book of foreign law preferred
by the author and have no authoritative value. For
this we shall have to wait until the three expressions
are defined by the offil:dal Bureau charged with the
granting of patents, or the Jurisprudence of the Supreme
Court, or by an Interpretative Decision of the Judicial
Yuan.
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iii/ If "application for.a patent has been made te.
a foreign government more than one year previously". Legislators
in all countries have found. difficulty in this question of patents
granted by foreign governments. Since on the one hand an invention
already patented in one country may easily be imitated in another,
and on the other hand an inventor cannot possibly present applica-
tions for a patent simultaneously in every country in the world,
the Convention of Union for the Protection of Industrial Production,
signed at Pari p on March 20th 1883 and last revised at London on
June 2nd 1934 I), lays down in Article 4. A (i) that "Anyone who
has regularly registered a request for a patent for an invention,
pattern a design for an industrial model, etc.... in one of the
tountries of the Union, or his assignees, shall enjoy a right of
priority to make the same registration in the other countries,
within the time-limits stated below" Article 4. C. (i). "The
time limits for priority mentioned above shall be twelve months for
patents for inventions and patterns and six months for industrial
designs and models". Acting on this provision, the American Law,
Section 4887, lays down that an invention cannot be patented in
the United States if the inventor has already taken out a foreign
patent whose registration dates back more than twelve months be-
ft:iv:the American application. In other words if anyone waits 'bore
than twelve wonths after the first application, made abroad, before
registering his application in the United States, he can only obtain
his patent if none of his applications made abroad have yet re-
sulted in the granting of a patent.
The Chinese Law is still more severe, since if
an application has been made abroad, more than one year earlier, it
is sufficient to destroy the novelty of the invention, without
raising the question whether the foreign patent has actually been
granted or not.
This provision, though quite defensible in itself
and based on the Convention of Union, may nevertheless raise some
practical diffioulties at least during its first years of enforce-
ment, Actually few Chinese inventions seem to have been patented
abroad and the provision falls mainly on inventions made by for-
eigners and already patented by them in their own countries. Accord-
ing to this provision foreigners who have already registered a
reques,t :or a patent in another country should, within twelve
months of that request, present another in China, on pain of for-
feiture. But the procedure for granting these patents takes some
time and it is quite possible not only that the first application
made abroad may not result in the granting of a patent within
twelve months but that it may end in failure. If therefore the
inventor must present another application in China even before
the foreign patent has been granted, this may cause him needless
expense, if for example his application is refused both abroad
and in China. This is all the more probable since given the quasi
uniformity of patent laws, the same application is likely to have
1) The Convention of Union of Paris March 20th, 1883, for the
Protection of Industrial Ownership, has since been revised
several times at jnternational conferences (Brussels, Dec. 14,
1900; Washington, June 2, 1911; the Hague, Nov. 6, 1925; Lon- .
don, June 2, 1934). The acts adopted by these conferences only
come into force in the member countries after they have been
ratified by the Government concerned. China was not among the
39 countries who had signed the Convention before the War. -
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the same result in different .roundizies.
0002-1
The American system, by which if a patent has been
applied for abroad More than a year previously, the application may
be made in the United States uhles a foreign patent has actually
been granted, seems more adaptable.
The most serious point is that the new Chinese
Law only oomee into force on the 1st of January 1949 and there is
no indication whether foreigners can at the moment patent their
inventions in China, since the Provisional Ruling, actually govern-
ing all matters of patents, give this right to Chinese only, as we
have said above. Since mo3t foreign inventions have been patented ?
abroad for more than a year,'clearly the applications for these
patents date back longer than a year; therefore patents will not be-
able to be taken out for them in China, sinoe more than a year will
have elapsed between the application made abroad and that made in
China. Moreover fundamentally if there has been a delay in applying
for the Chinese patent this csot be imputed to the foreigner who
makes application; it seems only fair therefore that at least for
the first few years of theLaw's application this rule sholld be
waived. Another solution would be, since reciprocal recognition
ef patent rights is based on a treaty, to insert in treaties to be
made with foreign countries a special clause to set right the in-
conveniences of Article 2.... in the:passage with which we have
been dealing.
iv/ If If "it has been exhibited in a government
sponsored or authorized exhibition and application has not been
made for a patent 'within six months of the opening of the exhibition".
Exhibitions are extremely useful and inventori should be encouraged .
to show their inventions. The inventions must therefore be protected,
but on two conditions; application must be made within six months
Of the exhibition's opening; and the exhibition must be organised
or approved by the Government.
v/ If "prior, to application for a patent if has
been secretly manufactured in large quantities for purposes other
than experiment"'. The pbject of this provision is to prevent the
inventor from keeping his invention secret too long, against the
public interest.
B. - Negative conditions which prevent an
invention from being of use industrially.
Ah invention has no industrial value if it is
impracticable or if it fails to reach the stage of industrial ex-
ploitation. (Article 3)
The two thing that matter in an invention are
that it should be useful and that it should be applicable to indus-
try. If the first is absent the invention is obviously valueless;
if the second, the invention is still in the stage of theory and
experiment and therefore does not yet constitute a technique which
ean be applied practically.
Certain inventions although new and of industrial vjue.
cannot be patented if they relate to "chemicals 1), food drink and
NOTE: 1) In certain countries, as in the U.S.A., chemical products
can be patented.
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articles which are habit fprming in continuous uses; drugs and their
preparation; any article produced ualer an invention whose use Loa-
travenes the law; anything detrimental to public order, good mo7:ala
or health". Article 4. On this roint reference to foreign laws
shows that there is local variaticn in the restrictions laid down,
while the Chinese Law seems to have collected these restrictions
and included the,.. all.
When "an invention must be kept secret.for militery
reasons" it is not declared non-patentable as in the cases just
enumerated but "the patent righ:s and privileges appertaining there-
to may be taken over by tte Govelenment", tiect to secure the inventor
from loss on this account, a suitablc compensation should be made
to him. (Article 5. ),furter, "the Government may restrict or re-
quisition a ,,art or the wh6le a pA.tent right for military use cY
to meet the requirements o_ state enterprises, with the proviso
that the patentee shall be compenaated" (Article 72).
2. Application for patents.
A. - Organ charged with granting patents.
When an invuntion has been made which fulfils ce
required conditions for obtaining a patent, application for one
maybe made by the inventor himself or his assignees or heirs, the
right to apply for the patent being transferable and transmissible
by inheritance according to Article 7. Aacording to Article 10. of
the Law a Patent Office is to be cre.ted by the Ministry of Econanc
Affairs to deal with all matters concerning the granting of patente:
applications for patents should therefore be addressed to that
Office.
' The Patent Law was promulgated in 1944 and it was
intended that the Patent Office should be set up in the year after
the war ended; unfortunately for many reasons this proved impossible.
In October 1946, to prevent further delay i.l the enforcement of the
Law the Ministry of Economic Affairs ordered the Bureau of Trademarks
to take charge also of matters concerning patenta. In most coun-
tries, the same office deals with both trademarks and patents, but
in Chinese law the Patent Law speaks of a Patent Office and the Law
on Trademarks of a Bureau of Trademarks. Unless two different
offices are to be set up one or the other of these laws should be
modified. Meanwhile the care of patents has been given by the .
Ministry of Boo:lc:sic Affairs to the Bureau of Trademarks which has
already been in existence in China for more than twenty years and
which was authorized by the ixeCutive Yuan in May 1947 to set up
within, the Bureau a Commission to examine patents, with Rules for
Organisation in sixteen articles 1). ?
B. - The Procedure of Application for Patents.
"Application for a patent shall be made to the
Patent Office by the inventor or his assignees or his heirs, by
submitting a written application, a detailed specification, a Flan,
a model or a specimen, together with a sworn statement". (Art. 12.)
It may be not,L.d p.t once, for these as for all
other documents to be presented to the Patent Office, that all the
. NOTE: 1) See below for further details.
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documents required by the Law cr her its Rules of Application
be submitted in making an applicatiee obeli he written in the
Chinese language with the exception of Chinese tranelatiors of
scientific terms which shell be acccml:aeied by the original teree
in the foreign language, if the apelicant is a foreigner and th-:
original documents are in G forsiEn ,.angaage, besides a trans-
lation in Chinese the original shall also te sv.bmitte3.? (ArtLe).e
3. Rules for Application).
The points to be given in the detailed specifi-
eation are enumerated in Art: e 4 of the Rules of Application an
the rules to be observed weth rogerd to models or specimens in
Article 5.
The inventor ie allowed "to 7eand over the manage-
ment of his application for a patent and the affaire eonneetel with
the patent to an agent" (Article 13.) He is Cf ccurse pe:e-feee7y
free to manage the affairs for hemelef if he prefere.
C. - The Applicant.
The applicant is the inventor himnelf or anyon
who has acquired from him the right of application (hairs or
assignees). The Law contains no conditions concerning the ee:i e-i-
ality of the applicantg but a foreign applicant must be able el
appeal to a reciprocal treaty of protection (Article 14). The
foreigner applying for a patent need not be domiciled in China!
"When a foreign citizen applies for a patent in accordance with -
Article 14 of this Law, he shall appoint an agent to act for h:.m
as provided in Article 14 of the Rules for Application and shall
glibuit his certificate of nationality. In the case of a jueidecal
Person, the documents giving evidence of such juridical pereoneAey
shall also be submitted". (Article 17 Ruleo of Application). Ter
terms of Article 14 of the Riles are "Agents..., shall be resteeeed
to those who comply with the provisions of the Rules Governing
Agents. The Rules Governing Agents shall be drawn up oeparately".
This provision, reasonable enough when applied to foreigners
domiciled in China, has'no reason when applied to foreigners wn)
are so domiciled. Yet according to the literal interpretation uf
the text it applies to all foreigners without distinction of
domicile.
If the Law contains no restrictions on the nation-
ality of the applicant, it fcllows the American law in forbidding
any member of the staff of the Patent Offiee, during his tern ef
office, to "apply for a patent or receive, directly or indirectly,
any right or interest pertaining to a patent, otheewise than by
inheritance". (Artecle 20). The object of this provision is to
prevent fraud.
When a patent is aoplied for for an inveetion al-
ready patented or for whose patenting application has been mad-
abroad, the applicant in China according te the Chenese Law,
be "the "the original applipant who mane the application abroad, or
lawful assignee (Artiole 19. Rules of Applicator.). Also "the
applicant shall state in bis application the date on which he
filed application abroad .1), the date on which the patent was
- - - - ----- -
NOTE: 1) If this date is more than a year eater, tho in7(tnton i3
no longer new, acccrding to Axtiole 2 Fo.3 of the Law, a;
. stated above.
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granted, the sections and term or the patent and whether or not It
has been leased or put into use 1.)7 siecial pernission. Relevant
documents rut also be sent". (tic.le 20 of Rules for Applicai.ion,)
D. - The delicate question whether an employer
can patent an invention made by his employee is dealt with as fol3.-ws.
The Law distingnishes the hyPotheses (Art.51 ff.);
1/ If "an invention is made by an
the course of his actual onpiOynient... the right to
belong to the employdre-prov.ided that, if a contract
terms of that contraet phrj:11 bc-cbeerved";
ii/ If an invention is made- by the
is "related to the employee's trade.... the right to
be held jointly by both parties";
iii/ If "an invention, unconnected with his
occupation, is made by an employee..., the right to patent-shall
belong to the employee, provided that where the invention has i%-
volved use of the employer's materials or experience the e;,plo;-::r
may use. this invention in his own business on the basis of a con-
tract". In order to protect the employee the'Law elsewhere dear.
that aany contract concluded between an employee and his emplocr
which deprives the employee of any right or interest in his in-
vention shall be invalid".
employee
patent shaLl
exists th.';
employee but
patent shan
E. - The question of priority when two persons
apply to patent the same invention.
According to American law the first inventor alone
hai a right to the invention which is his property; the criterion
of invention is reduction to practice. In Chinese law there is
? a difference; what counts is not priority of invention but priority-
of application, for the law lays down in Article 15 that "where twc
or more persons apply separately for patents on the same invention,
the patent shall be granted' to the first applicant. Where appli-
cations are made on the same day the applicants shall be instructed
to reach an agreement by mutual consent. If they fail to reach an
agreement neither shall be granted a patent". This system is mcre
apt to. lead to injustice than the American, since it may mean a
race for the patent and the more prompt may obtain it before the
real inventor, intent on carrying on research and perfecting his
invention, has made an application. The great advantage of the
Chinese system, is the elimination of disputes, for while priority
of application is a simple matter of fact, priority of invention
is relatively difficult and often impossible to prove.
According to Article 9 of the Rules of Application
"when an application is sent by mail, it must be registerel, and
the Patent Office shall determine the priority-of applicants a:-
cording to the date on the postmark at the place of posting".
When can-those who have applied on the same day
for a patent be said to have 'failed.to reach an agreement'? The
Law says nothing on this poi n' but it has now been cleared .up by .
Article 22 of the Rules of Application:- "When applicants are
instructed, in accordance with Article 15 of-this Law, to reach
an agreement, the Patent Offict shall lay down a definite time
limit and if no report has been submitted on the expiration of this
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period, it shall be deemed that no a6reement has been reached".
P. - Supplemc,.tary Inventions.
Article la of the Law deals with the ease when
"the original inventor and another person both make the same fur-
ther invention and apply simultaneously for a patent"; the decision
is that "the patent shall be granted to the original inventor".
Actually, if while his patent still runs the Patentee makes a fur-
ther invention he an apply for a supplementary patent (Article 8).
If any person, using the invenaon of another while its patent
still runs, makes a further invention, he also may apply for a patent;
but he must make suitable cempensation to the original patentee or
arrange with him for joint preduction (Article 9). If the further
invention has been made simultaneoub]y by the original inventor Inel
by another, preferen,:e is Oven to the original inventor. One
pression of artiele 16, "simultaneously", is ambiguous. If it
means the same as the expressieh 'on the same day', used in Article
15, why change the term? Cr shall it be understood to mean the
original inventor makes applicativt while the other's applicatioo
is still under consideration when he has not yet obtained the
patent? Both interpretations are admissible.
G. - Examination and publication.
When an application for a patent reaches the com-
petent office, it remains to be decided whether the patent can be
granted without preliminary examination or whether such an examine--
tion is necessary. According to some legislations (France, Bel-
gium, etc..) as soon as the form of application has been correctly
filled up and sent in, the patent is granted, without any examina-
tion. In other countries (Great Britain, Germany, etc..) the
application is submitted to a preliminary examination; if this
proves satisfactory publicatica follows, as prescribed by the Law.
The Chinese Law follows the latter type.
As soon as an application has been made the first
step is to examine the application. According to the Law, this is
C to be done by an Examining Commission. Since, as we have said
above, no Patent Office has as yet been set up and its functions
are carried out by the Bureau of Trademarks, the Examining Commis-
sion is to be set up by this Bureau. According to the Rules for
the Organisation of an Examining Commission en Patents, 1947, the
Commission has four subdivisionst - a commission for mechanics and
electrical installations; a second for chemistry and mines; a third
for textiles and objects of daily-use; and a fourth for new pattern:J.
The Director of the Bureau of Trademarks is Chairman of each of
these commissions; in all there are to be thirty-two to forty-four
members for the four Commissions, eight of whom must work only on
the business of the Commissions while the others may concurrently
hold other posts. There are also to be four examiners, each at-
tached to one of the subcommission& according to their technical
qualifications.
Article 28 lays down the circumstances in which
an examiner shall withdraw; these are too obvious to need discussion
here.
According to the Rules for the Organisation of the
Commission, whenever a case comes up the President names on member
to make a preliminary examination and report; this report is then
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eireulated among the members sc that ea::-1 con give his .pinion;
finally the decision is made at a uesseon of he sub-eommission
concerned.
If the Examining Commissicn gives an unfavoareble
decision, the applicant "may within thirty daye from the date cf
service of the deciaion in writing, prepare a written statement of
his reasons and request a re-examination " (Article 31). Aeeordin7
to Article 34 the Head of the Patent Office - actually the Dileel:er
of the Bureau of Trademarks - shall name other members of the Co-
mission," who have not examined the criginal ase, to re-examire
the question of the patent and eeepere e decision in writing,
giving their reasons.... If anyone es elill diseatisfied with the
decision reached after re-exeunination, htl may within thiety days
from the day following servile oft he written decision, submit an
appeal to the Ministry of Econemie :ffairs 'for a floral considera-
tion and deoiuion" (Article 37).
"If it is deeided, afte2 examination, that a pa-
tent may be granted on an invention, this decision Oen he pt.bic
announced, together with a description and. a plan" (Article 30).
"If any person considers that any inrentior
lioly announced contains anything in contravention of the proei-
sions of Articles 1 to 4 of this Law, he may within six months ire.:
the day of public announcement draw up a statement and send it wit.,
documentary evidence to the Patent Office, drawing attention to the
objection and asking for a re-examination (Article 32).
"The Patent Office, having received the statement
of the objection shall at once send a duplicate copy to the appli-
cant requesting his to reply within one month. If he has not replied
within one month the applioation shall not stand (Artiele 33).
"If at the completion of the period for public
announoement no Objection has been presented or the objections have
not been upheld, the examination shall be final" (Article 38).
The patent is then granted to the applicant and must bear on it;-
1) The applicant's name; 2) The serial nuniber of the certificate;
3) The article or method patented; 4) The term of years of the -.
patent; 5) The date of issue of the Certificate". (Article 30.
Rules for Application).
II. - Inventions (Continue4: Patent Rights.
1. Exclusive eharaeter of the Rights.
'-eTheepatent confers on its owner the exclusive
right "to manufacture,sell or use an invention. If the invention
is a process, artiCIps manufactured by direct use of that pros;.
-shall be included". jArticle 42). But in the following cases the
patentee Dermot olaim his exclusive rf_ght;-
i/ "When an invention is used for research or
experiment with no idea of gain ".
ii/ "When, before the application, the invention
was in use in China, or when the necessary preparations for sueh use
had been completed; provided that this shall not apply if know-
ledge of the manufacture was Obtained from the holder of the richt
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of application for the patent within six months of applicatien
made and if the applicant for the patent ha % made a declaration th
he reserved his patent rights".
iii/ "If the goods are already in China when
application is made".
?
iv/ "If transport machinery or equirment is only
in transit through China".
v/ If a patent right held by a person other tl-Lan
the holder of the right of application for the patent is revcked
on the initiative of the (rightful) patentee and if The h3l6c:- of
the right of exploitation has in good faith and before the initi-.-
tion of proceedings used the invention in China or completed the
necessary preparations for such use".
2. Coming in existence of the Patent Right,
Strictly speaking the patent right only con:-! sate
existence when the patent is granted. This however, while in it-
self logical, might lead to injustice since rivals could imit-It_t
an invention with impunity so long as the patent was not yet rrn.::-
For this reason it is laid down in Article 44 8 I of the Law th-et
"when once a patent ease has been publicly announced (i.e. when it
has successfully passed the examination stage) the patent right
shall be permitted to take effect provisionally. "If however this
provisional effectiveness" is -invalidated on account of errors .n
the procedure of application or because the patent is refused by
reason of an objeotion, the effectiveness shall be deemed void e.b
inition (Article 44, % 2)
3. Duration of the PL;.tent.
The duration of patents is not the same in all
countries; nor does it anywhere begin from the same point. It begins
from the day applieation is made and lasts fifteen years in France,
Switzerland, Rumania; seVenteen years in Denmark, Sweden, Norway;
eighteen years in Germany, Italy; twenty years in Hungary, Finan.,
Belgium. It begins from the day of publication and lasts fifteen
years-in Yugoslavia, Japan and Czechoslovakia; begins from the lay
the patent is granted and is valid for ten years in the Argentine,
Peru and. Venezuela; for fifteen years in USSR, Poland, Brazil Lad
Chile; for seventeen years in the United States and Canada and for
twenty years in Spain and Colombia.
In China, according to the Provisional Rules, the
duration of a patent for an invention may be five or ten years.
(Article 2); moreover according to Article 22 of the same Rules
application may be made to the Ministry of Economic Affairs for the
above duration to be prolonged, not more than once and for five years
only.
According to ttie-Law the duration of the patent
any invention is fifteen years this term is current from the
day of application, not from the grating of the patent. ,In
- -
NOTE: 1) There are no longer to be two types of patent for 5 ?re:.
10 years as there are under the Provisional Rulea.
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Principle applications for prolongation of the term are no longci.
permitted as they were under the Provisional Rules. By exoeption,
"a patentee who suffers loss owing to the outbreak of war between
the Republic of China and a foreign country, may apply for his pa-
tent to be extended for one period of 5 or 10 years; but this shall
not apply to patent rights held by citizen's of a belligerent coun-
try." (Article 55). It is clear that 'belligerent' - in Chinese:
Chiao Chad Kuo - must be interpreted here in the meaning of 'enemy':
otherwise allies- of China would be penalized as well as her foes
and only neutrals could enjoy the benefit of prolongation.
When the duration laid down in t)-e. Law expires,
the patent is extinct, the invention becomes public property an.
anyone may use it without any restriction. Since the durati,n
runs from the day of application the patent expires the day ate
the date eorresponding. to the date of application.
than expiry.
4. Extinction of Patent Rights for reasons other
?
Besides expiry of their term, which is the
cause of loss of patent rights, any of the following oauses ma*
the same effect. The patent becomes extinct:- (Article 59)
i/ "On the date of the patentee's death, if ter
is no heir to the patent right". This shows that a patent right
does not lapse to the State viten an estate escheats, although in
principle all the goods of such an estate lapse to the State.
(Article 1185 of the Civil Law).
ii/ "if the patentee has not yet paid the patent
fees on.thp.expiry of the additional period allowed for the payment
of the required fees after the expiration of the original term".
iii/ "If a patentee voluntarily gives up his
right, on a date -signified by him in writing"; but "a patentee may
not give up a patent right without the consent of any beneficiary
from a conditional lease or assignment or any holder of a con-
ditional right of exploitation" (Article 58).
iv/ "If a treaty of the kind specified in Article
14 of this Law lapses; on the date on which the treaty lapses".
This provision is explained by the fact that
the treaty serves as basis for the application for a patent, th:
eAnction of the treaty ipso facto brings about the expiry of the
patent. But it ma7 be argued that the patent, once granted, con-
stitutes a kight acquired by its owner, and it is not right that
the lapsing of a treaty, which may take place for many reasons
which merely concern the two States and have no direct bearing
on their citizens, should react on rights previously acquired by
citizens of the contracting States. The result of the lapsin:: of
a treaty of reciprocity should surely be to put an end to the
granting of patents but not to annul those already given.
5. Cancellation of Patents.
"A patent right shall be concelled and the cer-
tificate withdrawn in any of the following cases : - (Artic1,-, 60).
? 1/ "If there has been a contravention of the
Proviltons 1 to 4 of the Law". Since Articles 1 to ,4 lay down the
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coPdAions necessary for an inventirm to be patented, it ic logical
that the sanction for contravening them should entail the cancella-
tion of the patent.
ii/ "If the patentee is not the holder of the
right of application for the patent". This shows that even after
the term for publication is over, the true holder of the right
application for the patent has the power to object to the patent
granted to someone who had no right to apply for it, and to demr.ld
its cancellation.
iii/ "If darticulars necessary for use have beer.
intentionally omitteo in the specification or plan, or if unneces-
sary particulars have been intertionally included in it, making its
use impossible or difficult".
iv/ "if the contents of the s2ecification differ
the specification previously used when applicat;r.r.
foreign country".
v/ "If the facts recorded in the specificatioL d.
the real process used for the invention".
from those of
was made in a
not represent
The person with a right to initiate proceedings
on any of these heads is, for No. "he holder of the right cf
application forthe patent" only; for the other categories anyone
may initiate propeedings "provided that if the motion is not up-
held the same person may not initiate further proceedings on the
same grounds". (Article 61) .
When such proceedings have been brought before it
the Patent Office must act according to the rules for reexamination
(Article 62). Cancellation of the patent has not the same effect
as its expiry. The latter only affects the future, leaving the
patent with all its attached rights complete in the past, but can-
cellation is retreactive; "where a patent right is cancelled it
shall be deemed to have been without effect ab initio" (Article 63).
"If a patent right has been cancelled but its supplementary patents
have not been cancelled, they shall be considered as independent
patent rights', and. new certificates shall be issued for them, only
until the date of expiry of the original patent right". (Artic)e 61)
6. Utilisation of the Patent Right.
The question of utilisation of the Patent right is
dealt with in two places in the Law. The first is more particular3
concerned with the persons who have the right to utilise it, the
second with the obligation to utilise.
A. - The Persons who have the
right to utilise it.
Instead of himself putting this invention into use
the 'patentee may assign or lease the whole or part of his inven-
tion, conditionally or unconditionally, to another person for
utilisation" (Article 45). The term 'assign' includes acts of
sale, gift and exchange.
"Where a patent right is held jointly, and the
joint holders do not themselves utilise it, it can only be assigned
or leased to a third party by an agreement embodying the unanimous
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consent of all the coproprietors"- itrticle 47). This provision
simply,reproduces the rule contained in Article 819 0 II of the
Civil Law :- "Alienatien or modific:ation of the object or cons-
titution of a oharge on it must be done with the agreement of ail
the copyoprietors". But in exoption to the rule given in Article
819 8 1 of the Civil Law, by which "each coproprietor can freely
dispose of his own quota"-, Article 48 of the Patent Law lays down
that "A joint holder of -a paterit:ti:gbt shall nct assign his right-
ful part therein to anotqr hout the tipnsent of the
other joint_bolders". r " 4
Contracts concernng the assignment or lease of
patent rights shall be invalid in the following cases - ?
i/ "If the contract forbids ev restricts the use
by the assignee of any given article or process'not supplied by
the assignor or lessor". ?
?
ii/ "If the contract requires the aesignse to
buy from the assignor any Product or raw material not covered by
the patent".
iii/ "If the contract fixes too high a fee for
the assignment or lease, act that the A?tiliser is unable to make a
reasonable profit on the utili-Ltion".
It is clear that the object of the legislation is
to maintain a certain equality between the contracting parties
and to prevent the imposing of too onerous conditions by the
patentee.
We may note, finallyr that both in case of assign-
ment and in acquisition by inheritance.application may be made to
the Patent Office, accompanied by documentary evidence, in order
to obtain a new certificate granted in-the name of the new
patentee. (Articles 49 and 50).
B. - Obligation to utilise the invention.
Since the patent confers an exclusive right to
manufacture, cell or use, at long as it remains valid the public
cannot utilise the invention which can be utilised only by the
patentee. But it is a matter of general interest that inventions
which have been patented should be utilised as soon and as com-
pletely as poseible. No one therefore can be allowed at the same
time to hold the erclusive right to its utilisation, through taking
out a patent, and to abstain from developing it. Such procedure
would be against both industrial progress and the good of society.
This is why the Law attaches such importance to utilisation. Ac-
cording to Article 67, "if, without adequate reason, an invention
has not been utilised or has not been adequately utilised in China
within three years bf the issue of a patent on it", the Patent
Office may take either of.two measures: - it may "cancel the pa-
tent right ex officio", in which case the patent no.longer exists
and the invention becomes public property; or it may "on the peti-
tion of an interested party, pt..rnit him to utilise it". In this
latter case the patent right subsists, the general public has no
right to utilise the invention concerned, but the right of utilisa-
tion has been transferred from the patentee to the person who has
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been given the "special permission?.. 1). For this reason the patentee
is to be notified and given compensation. ' "Disputes concerning the
amount of compensation shall be settled by the Patent Office"; the
Rules of Application enumerate the "particulars which should be..
noted.... for making -a valuation of the patent right" (Articles
36 and 37. Rules of Application.)
It is important to point out that the utilisation
or adequate utilisation in question must be made in China. Because
of international interdependence the inventor is obliged to apply '
for patents in several countries to secure his exclusive right of
utilisation. But either because of the limited market or because of
special conditions essential to utilisation, which exist in some
countries but not in others, th- patentee may hare valid reasons
to delay utilisation in some countries. Yet according to the Chinese
law it is not enough that the patentee should have begun 'utilising
his invention in any part of the World: if he has not utilised it
or has not utilised it adequately in Chinese territory he may incur
the abhve penalties.
Another point to be noticed is that .he ruling ef
the Chinese Law concerning the "special permission" is more severe
than that of the Convention of Union for the _Protection of Indus-
trial Ownership which lays down the following measures : - (Article
5, as revised at the Hague, Nov. 6, 1925).
"Article 5.... 2) "... each country of the Union
shall have power to take the necessary legislative measures to pre-
vent any abuses which might arise from the exercise of the exclusive
right conferred by the patent, for example by lack of utilisation.
3) These measures cab include for-
, .
feiture of the patent only if the granting of obligatory licenceS
does not suffice to prevent such abuses.
4) In any case the granting of all
Obligatory Licehce cannot bd asked tor until a period of three yeLra
has elapsed since the date of issue of the patent, and this licence
can be given only if the patentee can allege no legitimate excuse
in Justification. No action may be taken to forfeit or canbel the
patent until the expiration of two full years from the granting of
the first Obligatory licence".
These stages are not retained in the Chinese Law,
aocording to which the "special permission" and cancellation can
be carried out independently of each other.
Non-utilisation presents no special difficulty,
since it simply means complete abstention on the part of the patentee.
But it is not easy to decide Whether an invention has been adequately
utilised. The Law gives the following details in Article 68 : -
mAn invention shall be deemed not to be adequately exploited in any
of the following cases.; --
1/ If goods made under a patented invention could
be used in China but are not manufactured on a large scale, and no
adequate reason is produced.
NOTE: 1) The "special permission" of the Chinese Law corresponds to
the "obligatory licence" preconised by the Convention of
Union for the Protection of Industrial Ownership of which
we have already spoken and which we shall have further
occasion to mention below.
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ii/ If a patentee manuractures his -invention en-
tirely or mainly abroad and imports the products into China.
iii/ If the patentee of a subsidiary invention
based on someone else's original invention cannot utilise his own
invention without also utilising the original invention, and the
patentee or the original invention refuses to lease it on reasorm-oll
terms to be utilised by the inventor of the subsidiary invention.
iv/ If the parts are imported from abroad and
merely aeeembled in China."
But it is not enough to penalise non utilisation
or inadequate utilisation ; even if an invention is adequately
utilised, its production may not be enough to satisfy the needs of
the country. In this case, if the product manufactured according
to the inVention could ?replace goods vitally needed in China" the
Patent Office "may order an increase of production within a fixed
time limit"; and if the patentee does not carry out this order thE.
patent right may be cancelled at the term of the period fixed by
the Patent Office (Article 70).
. . .
If anyone other than the patentee, having succee e--
in obtaining, according to the provieions of Article 67, special
permiesion to utilise an invention,. fella to utilise it adequately,
the ateult Office may, on request of an interested party or acting
i
on its on powers 4ancel the permiseion for utilisation"- (Article
69). Al hough thelLaw states nothing as to the consequences of such
eanddlla ion, applitently either of the solutions given in Article
67 may be adopted that is, either the patent right is cancelled and
the invention becomes public Property, or the Permission to utilise
the invention is given to another person.
7. Legal Protection of the Patent Right. ?
Since the patent gives an exclusive right, the law
must pllovide effective sanctions against anyone who violates it.
First of all the public muet be able to know that the invention haA
been patented, in order to refrain from any action which would vio-
late the right. Therefore, according to Article 73, "The patentee
shall attach the patent mark and the number of his patent to the
patented article or its container, and may require any holder of
the right of utilisation to do the same. If because the patent
mark has not been attached, othere are unaware that the article is
patented and infringe the patent right, no damages may be claimed".
Mere possession of a patent is therefore not sufficient for protec-
tion; the patent mark and the number of the patent must be attached
to goods or container, under pain of losing all claim to damages.
But since the invention already enjoys a provisional
protection as soon as the application for a patent reaches the
stage of publication, the public must be informed of this. Since
the patent has not yet been-issued, its mark and number cannot be
used, but the goods or their container may be marked with the ex-
pression "Patent provisionally granted duringperiod of publication".
(Article 46 11 II, Rules of Application). Since the patent mark
and the nuMber serve to show the existence of the patent, they may
no longer be used ?after the patent right has expired or been can-
celled",(Article 46, N I, Rules of Application). "The word IpatenteL:'
or any mark which would lead people to euppose that a patent had
been granted" may not beftattached to a non-patented article or-to en
article produced by a non-patented procees?. Further an advertie--
ment by a patentee may not go beyond the scope of the patent
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(Law, Article 74). Anyone violating the above provisions of .,rti-
cle 74 shall be punished by imprisonment with penal servitude for
a period not exceeding 6 months, or by detention1), or by a Pa
Chin2) fine of not more than one thousand dollars. (Article 92).
Two series of sanctions are provided against via-
lation of patent rights : -
?
A. - Civil Sanctions z under which
swieral cases must be distinguished:-
1/ The case where there has been an actual viola-
tion of the right. "The patentee or holder of the right of-Ilitilisa-
tion or its lessee may demand the cessation of acts of infria3ement
and the payment of damages"; and the wronged party may bring a suit
for this purpose (Article 81).
In order to give effective security to the?wroneed
party for the payment of the damage', "an article used in infrinenr
the patent right of another or an article produced as the result of
such infringement, may be provisionally attached on the petition of
,the person whose right has been infringed upon; after judgement has
been given on the damages it may be used to pay the damages in
whole or in part" (Article 83). Again it may happen that the viola-
tion of the patent right has given false impressions of the patented
product?on the part of the public and diminished its markets. To
Meet this indonvenience Article 87 of the Law declates that "after
judgment had been given, the person whose rights have been infrined
may apply to the Court for publication of the whole or a part of the
judgement, in the newspapers : the expenses for this shall he met by
the losing party".
ii/ The case where thereliave been preparations
tending towards the violation of the patent right but it has not
actually been violated.
"If all preparations are already complete tocounter-
feit, imitate or illegally use the patented invention of anothet
person, the patentee, the holder of the right to utilise or its les-
sor, may demand that such acts should cease" (Article 84). Obviously
since such acts have as yet caused no.loss to the patentee, the holder
of the right to utilise or the lessee, there,is no occasion for
claiming damages as in the foregoing case. .
B. - Penal Sanctions.
.
i/ Counterfeiting (Article 89). "Any person who
counterfeits a patented invention shall be punished with imprison-
ment not exceeding three years or detention, or in addition thereto
or in lieu thereof a FA Chin fine of not more than. five thousand '
dollars):
NOTES: 1) In Chinese Law detention is ordinarily for two months ex-
cept in cases of aggravation of the penalty when it may be
extended to four months. CP. Penal Code Art. 33.
2) The term Fa Chin is used for a strictly penal fine under
a criminal law: that is, a pecuniary punishment imposed by
a lawful tribunal on a person convicted of crime or
41sdemeanour.
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ii/ Imitation (Article 90). "Any person who imi-
tates a patented invention or makes illegal use of the process con-
cerned, shall be punished with imprisonment not exceeding two
years, or detention, or in addition thereto, or in lieu thereof a
Fa Chin fine of not more than three thousand dollars":
iii/ Sale (Article 91). '"Any person who sells,
or exhibits for sale or imports from abroad an article which he
clearly knows to have been counterfeited or imitated from a pa-
tented inventioh shall be punished with imprisonment not exceeding
one year, or detention or a fine of not more than two thousand
dollarsV
It is to be noted however that proceedings against
the above infringements "may only be instituted on the complaint
of the injured party and that such complaint shall be made within
one year of cognisance of the infringement" (Artiele 93).
? This provisions seems rather extraordinary, sincc
in the Chinese Penal Code proceedings can be instituted against
eounterfeiting or fraudulent imitation of trade marks, or the sLle
of products under cover of false marks without any neoessity of a
somplaint from the party injured.
8. Publication of Patents.
Besides the publication which is an obligatory
part of the procedure in granting the patent to give others an
opportunity to object, when the patent is finally granted publica-
tion must again be made, so that the public may know of the existence
of the patent right. For the same reason the expiry.of eancelle-
tion of the patent right should also be published (Article 65).
A Register of Patents is also kept at the Patent
Office, containing "the names of patented inventions and the period
of their patents, the names and addresses of the patentees or 'their
agents, together with other rights concerning patents and all other
matters required by the law." (Article 66)
9. EXpenses.
These may be divided into three types :-
i/ Fees for services asked of the Patent Office
(Article 80) such as the fees payable on application for a patent.
when the applicatior is opposed, for re-examination, when applying
for a supplementary patent. These fees are charged whether the
application is granted or refused by the Office, exoept for certain
services, such as the copying of the papers, where the fee is cal-
culated on the number of characters copied.
ii/ Fee for the certificate, when the patent is
granted (Article 75).
iii/ Annual cbarges. As the patent extends over
several years (fifteen years) it is subject to annual charges,
payable each year on a progressive scale Which increases with the
age of the patent. This provision (Article 76) is explained by the
fact that the patent prevents the public from utilising the same
invention: it is logical that some restraint should be put cm the
number of patents by the levying of these annual charges.
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Chapter III, - Designs and Patterns.
1. Designs.
Not only inventjons are patentable, but also de-
signs and patterns. One of the chief differences between an in-
vention and a design is that the former deals with something
abstract, such as a process of manufacture, formerly undiscovered,
while the latter has to do with a concrete object. Therefore
While a patent for An invention can be applied for to cover a pro-
cess of manufacture, without specifying beforehand the exact fcrm
of the products to be madeApy that process; a patent for a design
is applied t'or to cover a oduct esually already in Manufacture,
but for which an exact model is provided. In fact the model it-
self usually forms the object of the patent.
A design "related to the shape, structure or co%-
struction of any article" is natentable if it fulfils two conditions-
1/ It must be new. ii/ It aoist have practical utility.
The Law gives no criterion for the practical uti-
lity of the design, this question being left to the judgment of
tha Patent Office - or at present of the Bureau of Trademarks -
which must take in consideration universally admitted principles
on this matter, and also the precedents to be gradually built up
in China.
As for inventions. the Law avoids any definition
of novelty and is content to lay down some negative conditions
which prevent the consideration of a design as new. These conci-
tions call for no special :omment, being the same as those quoted
above for inventions.
Even if they are new and of practical utility,
designs cannot be patented in the following cases (Article 97):
i/ "Any article produced from a design the use of
which contravenes the Law".
ii/ "Any article detrimental to public order, 4
good morals or health".
'iii/ "Any article shapnd like or resembling the
National Party or Military flag, the national emblem or a
decoration."
The rules for applying for a patent for a design
are almost the same as for an invention. We may note, among others,
that the right of applying f7'e a patent for a new design can be
transmitted by assignment or by succession (Article 110, of. ArU-
cle 7)s that foreigners can apply if their own country has signed
with Oh/1m a treaty of reciprocal recognition of patents, - (Article
110, of. article 14); that if several applications are made for tl-,e
same design, the patent is given to the first application receive.
(Article 110, 1'. Article 17) and that ownership of a design made
by an employee follows the same rules as for inventions (Article
110, of. Artieles 51 - 54),
The procedure in applying for patents for new de-
signs also falls into two parts s examnation and publicatio*a.
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?Examination is in the hands of an Examining Commission set up ty
the Bureau of Trademarks. If an examination results in refusal tai*
the application, the applicant may hPve recourse to the orocedvre
of re-examination; if he again fails, he can petition the Minist:7
of Economic Affairs for a final decision, If a design proves on
examination to be patentable, publication follows, as for inventions;
during the period of publication anyone who claims that the design
is not patentable by reason of some violation of Articles 95 to '0,
or any interested person who considers the application has not been
made by the right applicant (the creator, his assignee or his heir),
may, within six months of the day of publication, file a protest
with the Patent .Office, requesting re-examination (Article 101).
After a design has been examined and the decisien
has become final ("If at the end of the period of palication no ?
one has filed a protest, or no protest has been upheld, the exa-c.d-
nation shall become final". Article 38),a patent shall then be
granted and a certificate issued- (Arti:Ile 98).
Moreover since Article 44 of the Law applies
designs, after the public announcement, even before the patent Las
been granted, the patent right already exists provisionally with
regard to the design for which the patent has been asked.
In what does the patent right on a design consists?
Article 102 defines it as an exclusive right vested in the patentee
to manufacture, sell, or utilise the design.
The term of a patent right on a desigaris te be
ten years from the date of application (Article 99). According to
the Provisional Rules such a patent may hara a duration of either
three or five years.
The patent on a design may be assigned or leased
for utilisation, to another person either with or without restric-
tions (Article 103).
The causes of extinction of the patent on a de-
sign are the same as for an invention. Reasons for its cancella-
tion, as given in Article 104, also very closely resemble those
given for a patent on an invention.
It is important to. note that the question of uti-
lisation, so much stressed in the Law with regard to inventions,
does not appear with regard to designs. The Law makes no provi-
sion for forfeiture in case of non-utilisation, since the non-
utilisation of a design causes no harm to society.
The patentee must, as in the case of an invention,
attach the patent mark and the number of his patent to the patented
articles or their container" so that "where in consequence of the
patent mark not having been attached, others are unaware that the
article is patented' and infringe the patent right, no claim may be
made for damages', (Article 110). Again, during the period of pub-
lication, when the applicant already enjoys a provisional protec-
tion, he may mark on his product the expression: "patent provision-
ally granted during period of public announcement" (Article 46
% II of Rules of Application)1).
NOTE: 1) This is equivalent to the English expression "Patent
applied for".
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a
For violation of the patent right on a design the
civil sanctions are the seam as for aa invention. The penal sanctions
are also aImoet the same but rather less severe (Articles 106-106).
4.4141ou proceedia42 can be instituted only on com-
plaint of the injured party, made during the year following the data
on which the injured party had cognizance of the infringement
(Article 109).
2. Patterns.
After inventions, characterized by their industrial
value, and !'designs, with their practical utility, come patterns,
which have an aesthetic value only. In commercial competition, pro-
ducts made by the same process and with the same materials and the
same design, may be made more or less attractive to the customer by
the more or less aesthetic manner of their presentation.
? ? It is logical therefore to give an exclusive ri.itt
of use to anyone who has devised an original aesthetic presentation.
According to the Law a pattern "relating to thv
shape, decoration or colour of any article, must in order to be
patentable fulfil two conditions: it must be new and it must con-
form to aesthetic taste. The criterion of aesthetic value is left
to public opinion and the Judgment of the Patent Office; no rule can
be laid down. .
With regard to novelty the Law lays down, as for
inventions and desigus, a set of negative conditions; - i/ "That _
prior to the application an identical or similar pattern has appeared
in print or been publicly used in China; ii/ That a patent has
previously been granted on an identical or similar design or pattern"
(Article 112 6 1 and 2). 8inee there is no very clear distinction
between designs and patterns: what some consider a pattern may, in
fact, be considered a design by others and it is possible that an
identical or similar pattern May have been patented already under
either head.
It is noteworthy that though it is forbidden to pa-
tent the identical invention or the same design as that which has
already been patented, it is not forbidden to patent a similar in-
vention or design. But this cannot be the same with regard to pat-
terns since as a rule fraudulent imitation of a patented pattern con-
sists not in its reproduction but in the use of a similar pattern.
Patterns similar to one already patented are therefore forbidden in
the same way as identical patterns.
If, however, it is to the patentee's interest that
others should be forbidden to use similar patterns, it is equally to
his interest that he should be allowed to employ such similar patterns
himself. This is often done with regard to trademarks; the same
merchant may use several similar trademarks, registered. as 'united
marks'. (Article 4. Law on Trade Marks.) Therefore similar patterns
belonging to the same individual are considered as connected patterns
and may be patented as such.
The following cannot be patented as patterns
i/ Anything detrimental to public order, good
morals or health.
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ii/ Any article identical with or similar to the
national or party flags, the portrait of Dr. Sun Yat Sen, the
National Emblem, military flags, seals or decorations (Article 113).
As it does not cost anyone much to find a new pat-
tern conformed to aesthetic standards, it would be very illogical to
give him an exelusive right to apply the pattern to all products
without restriction. The.pattern'therefore, may be applitd 'only to
a definite article, specified in the application for the patent
(Artiole 117 9 I). The classification ef articles on which the
pattern is to be used shall be laid down by the ginistry of Etonomi:
Affairs (Article 117 R II).
The procedure of appliaation for patents for pat-
terns follows that for inventions and designs; but in the Rules for
Organisation of an Examining Commission for Patents, quoted above,
one of the four sub-commissions to be set up, is specially charged
with applicationsfor patents for patterns.
When the application is submitted to the Commission
for examination, two cases may arise. Either the application is
rejected after examination, and the applicant can have recourse to
the procedure for re-examination; or the application is accepted
and publication follows, serer inventions and designs: a provi-
sional patent then exists, protecting the applicant against viola-
tions of his right.
Luring the period of public announcement, for a
pattern; any person who condiders that, the pattern does not fulfil
the conditions required for a patent, as laid down in Articles 111 to
113 of the law, or any interested person who considers that the
application is not being made by the rightful applicant (the creator,
his assignee or his heir), may within six months of the day of pub-
lic announeement filei protest with the Patent Office requesting a
re-examination (Article 118).
If at the end of the period of public announcement
no protest has been filed or no filed protest has been upheld, a pa-
tent shall be granted and a eertificate issued.
The patent on a pattern consists in an exclusive
right to manufacture or sell the article designated for the utili-
aation of the pattern.
Neither the assignee nor the heir has, of cours-,
the right to use it except "in respect of the articles
for the utilisation of the pattern".(Article 121). A1,1ough Ar:a
121 deals only with assignment, making no mention of lease, it
Seene that the patentee can also lease out the patent right on a
pattern. The only restriotion on the disposal of a patent right
laid down by the Law is that 'connected patterns' cannot be separa-
tely assigned. The reason is clear; if connected patterns were
allowed to be separately assigned they would enter into competitior,
to their mutual loss.
The holder of a patent on.a pattern must attaz:b
the patent mark and the number of the patent to the patented arti-
cle or its container; during the period of publication and provi-
sional right his product may carry the expression "patent provi-
sionally granted during period of publication".
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The civil sanctions on violation of a patent on a
pattern are the same as for inventions or designs. So also are the
penal sanctions, but they are less severe.
As for designs, and for the same reason, the Law
attaches no penalty to the non-utilisation of a patented pattern.
To end this analysis we may notethat the Patent
Law comas into force only on Jam. 1, 1949; at present all questions
of patents, whether for inventions, designs or patterns, still cc.lhe
under the Provisional Rules. The question may therefore arise wYc-
ther when the law comes into force holders of patents under the
Provisional Rules will have to obtain a new patent according to the
conditions and procedure of the new law. This question is alrea(-Y
answered in Article 131 of the Law which lays down that ua patent
legally obtained before the enforcement of the present Law shall be
considered as a patent obtained under the present Law". But as
the duration of patents is not the same, being longer under the La*
than under the Provisional Rules. "the term of the patent shall be
limited to that originally granted" (Article 131).
Patents already granted before the Patent Law comes
into force keep their validity, with the duration given by the
Provisional Rules; but the applications for patents which have not
been decided on before the enforcement of the Law cannot be dealt
with according to the Provisional Rules once that enforcement has
taken place, but must then be dealt with under the Law (Article 132).
( End )
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UNI
Topic:
Author:
Periodical:
Date of Issue:
VERSIT. 3 ORE
BUREAU DE DOCUMENTATION
(Eonomie Chincise)
-------
, 280 Chungking Nan Lu (Dubail)
Tel 576l
-------
Activities of the Parmers'
Bank of China since the
Victory.
Wangilfring-pin
Centue4,1Bank-ntbly.
May 1948i
Document No: 102
Nature: Digest
Number of pages: 14
Remarks: The orlginal
- title., is: "The flies' Ban} Bank of 311i a
ACTIVITIES OF THE FARMERS' Bala
OF CHINA SINCE THE VICTORY.
The Farmer's Bank was established on April 1,1931,
through the amalgamation of the four Agricultural Banks of Horan,
Hupeh, Anhwei and Eiangsi Provinces1), for the specific purpose of
developing rural credit throughout the country. Farm loans how-
ever were also given by the Bank of Comaunicaticns, the Bank of
China, the Central Trust and the Nung Pen Chu2) and it is only
since 1942 that this field of business has been exclusively re-
served to the Farmers' Bank3). At that time, the Bank counted 52
branches, sub-branches and attached cooperative treasuries, mostly
distributed in the southwestern and northwestern provinces owing to
the occupation by the enemy of the Eastern parts of China.
The number of subordinate units greatly increased
in the following years and at the beginning of 1945 reached as many
as 706, distributed in 19 provinces, namely Szechuan, Sikang, Kwei-
chow, Yunnan, KWangtung, Kwangsi, Chekiang, Anhwei, Kiangsi, Fukien,
Hupeh, Hunan, Honan, Shensi, Kansu, Ninghsid, Tsinghai, Suiyuan,
EDITOR'S NOTES: 1) First known as the Four Provinces' Agrizultural
dank it received its present name after re-Irgani-
sation on June 4, 1935.
1
2) The Nung Pen Chu or Bureau-of Rural Capital was
created in 1936 by the National Government under
the joint auspices of the Ministry of Industry
and various banks in this country with a view to
helping the Chinese rural societies. It was -
later dissolved, during the Nar, on account of
maladudnistion.
3) Since the inauguration of the 'Central Cooperal.ive
Treasury on Nov. 1, 1946, there exists a partial
.duplication in operations relative to agricultural
loans, which were formerly attributed to the
Farmers' Bank only.
. _
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.4 J1
and Shansi, half of them being in Szechuan, Kweichow, Hunan and
Kwangsil).
When the area of operation expanded after V-J Day, .
the Bank readjusted the distribution of its various organs in ac-
cordance with the reconversion plan: new ones were quickly set up
in agricultural, industrial, commercial and communication centres
in the liberated coastal area, while those n the interior were
either reorganized or abolished. At the enc of 1946, the subordi-
nate offices numbered 760, which, besides the 19 provinces men-
tioned above, were scattered in Shantung, Kiangsu, Kirin, Liaoning,
Antung, Liaopeh, Jehol, Chahar and Hongkong. After many readjust-
ments, there were 744 branches and various organs at the end of 1947.
(See Table I on the next page)
The operations of the Farmers' Bank consist chiefl:.
in granting agricultural and land loans besides handling ordinary
banking business and trust transactions.
Before the Victory, agricultural loans were United
to promoting agricultural production, irrigation, the extension of
agriculture, marketing of agricultural products and subsidiary oc-
cupations for farmers. Farm investments were concurrently under-
taken. Land loans were made mainly to assist owner-farmers, flr
EDITOR'S NOTE: 3) (continued from p.1) .
According to Mr. Shou then-ch'eng, General Manager
of CCT, such duplication is only transitory, and
will easily be avoided when normality is re-
established. Mr..Shou suggests that the work di
the Farmers' Bank is more in the line of long
term investments though they are momentarily im-
possible on account of monetary depreciation.
On the other hand, r. Li Shu-ming, General
Manager of the Farmers' Bank, maintains that the
mission of the Bank being to regulate rural cre-
dit throughout China, agricultural loans under-
taken by CCT should be strictly coordinated with
its policy.
The "dispute" seems to have been settled in
principle by the two banks with regard to the
agricultural loans for 1948. Where offices of
the two institutions exist in the same area, all
loans in connection with cooperative enterprises,
including the cooperative loans stipulated in the
project of agricultural loans for 1948, are to be
taken up only by the Central Cooperative Treasury.
For further details concerning the Central
Cooperative Treasury, Cf. "A new GovernMcnt
Institution; The Central Cooperative Tre-asul.0
(Monthly Bulletin, No.XIV - Jan. 1948 - Study
No.XIV) and The Chinese Cooperatives since V-J
Day" By Lin Hung (Monthly Bulletin No.XVIII - May
1948 - Document 99.)
NOTE: 1) Szechuan, 205;. Hunan, 58; KWeichow, 83; Kwangsi, 54.
Asa..
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. A 1o= ?,,Iq r ahly p 4r
and Shapai, half of them being in Szechuan, Kweichow, Hunan and
Kwangsil).
4hen the area of operation expanded after V-J Day,
the Bank readjusted the distribution of its various organs in ac-
cordance with the reconversion plans new ones were quickly set up
in agricultural, industrial, commercial and communication centres
in the liberated coastal area, while those in the interior were
either reorganized or abolished. At the enc of 1946, the subordi-
nate offices numbered 760, which, besides the 19 provinces men-
tioned above, were scattered in Shantung, Kiangsu, Kirin, Liaoning,
Antung, Liaopeh, Jehol, Chahar and Hongkong. After many readjust-
ments, there were 744 branches and various organs at the end of 1947.
(See Table I on the next page)
The operations of the Farmers Bank consist chief13
in granting agricultural and land loans besides handling ordinary
banking business and trust transactions.
Before the Victory, agricultural loans were limited
to promoting agricultural production, irrigation, the extensicn of
apiculture, marketing of agricultural products and subsiaiary oc-
cupations for farmers. Farm investments were concurrently undtr-
taken. Land loans were made mainly to assist owner-farmers, fr
EDITOR'S NOTE: 3) (continued from p.1) .
According to Bk. Shou Bien-ch'eng, General Bnager
of CCT, such duplication is only transitory, and
will easily be avoided when normality is re-
established. Mr. Shou suggests that the work of
the Farmers' Bank is more in the line of long
term investments though they are momentarily im-
possible on account of monetary depreciation.
On the other hand, Zr. Li Shu-ming, General
Manager of the Farmers' Bank, maintains that the
mission of the Bank being to regulate rural cre-
dit throughout China, agricultural loans under-
taken by CCT should be strictly coordinated with
its policy.
The "dispute" seems to have been settled in
principle by the two banks with regard to the
agricultural loans for 1948. Where offices of
the two institutions exist in the same area, all
loans in connection with cooperative enterprises,
including the cooperative loans stipulated in the
project of agricultural loans for 1948, are to be
taken up only by the Central Cooperative Treasury.
For further details concerning the Central
Cooperative Treasury, Cf. "A new GovernMcnt Fimn-
cial Institution: The Central Cooperative Treasus_d
(Monthly Bulletin, No.XIV - Jan. 1948 - Study
No.XIV) and "The Chinese Cooperatives since V-J
Day" By Lin Hung (eonthly Bulletin No.XVIII - Bay
1948 - Document 99.)
NOTE: 1) Szechuan, 2051' Hunan, 58; KWeichow, 83; KWangsi, 54.
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Table I. Branches and Subordinate Organs of the Farmers' Bank.
Branches ic Cooperative Agricultural Granaries Total Number
Province Sub-branches Treasuries ' Inform.Offices
1945 1946 1947 1945 1946 1947 1945 1946 1947 1945 1946 1947 1945 1946 1947
Kiangsu 8 33 30 4 . 8 1 8 37 39
Chekiang 11 17 17 26 27 27 6 14 - 12 5 10 43 63 66
Anhwei 6 8 8 8 13 8 1 14 21 17
Kiangsi 12 12 12 2 2 2 14 15 11 6 9 28 35 34
Hunan 15 17 16 26 26 26 19 3 2 1 1 3 61 47 47
Hupeh 7 6 6 a 8 8 2 7 7 1 1 2 18 22 23
Szechuan 48 41 39 123 122 120 1 4 5 6 176 168 165
Sikang 5 . 5 5 10 10 10 15 15 15
RWeichow 12 9 8 54 52 54 5 5 2 1 2 71 67 66
Yunnan 9 6 6 :7 6 9 8 8 25 20 14
Kwangtung 30 28 28 6 16 10 2 36 44 40
Kviangsi 4 9 - 9 43 43 43 . 9 9 5 3 56 61 60
Fukien 20 22 20 1 2 2 6 6 5 2 2 1 29 32 28
Shensi 11 8 9 18 18 18 4 4 3 33 30 30
Shansi 3. 2 2 '2 3 2 3 5 4
Kansu 12 12 11 17 17 17 16 5 5 2 2 4 47 38 37
Hopeh .3 14. 12 3 14 12
Honan 5 8 ' 8 3 3 8 11 8
Shantung 2 6 8 1 1 2 6 10
Suiyuan 3 4 4 1 3 4 5
Ningsia 1 1 1 3 4 4 4 5 5
Kirin 2 2 2 2
Liaoning 1 7 9 1 7 9
Antung 1 1 1 1
Liaopeh 3 3 3 3
Tsinghai 1 1 1 1 1 1
Jehol 1 1 1 3.
Chahar 1 1 1 1
Hongkong 1 1 1 1 1 1
Total: 228 285 278 335 333 327. 112 119 93 10 23 46 686 760 744
Note: The ficu:'es for Shanchai, Nanking and the eight other municipalities under the direct control of
tho Exerrative Yuan are included in those for the respactive provinces in which they are located.
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the improvement and expropriation of land, the rearrangement of land
registers, the registration and utilization of public property in
towns and villages, the purchase of 1,_nd at standard value and re-
demarcation of boundaries. The trust department undertook thetranl-
portation of salt,-the purchase of materials, and the transportation
and marketing of agricultural products.
The scope of operations quickly expanded after the
Victory. To meet current needs, the Bank extended its loan policy
to the warehousing and transportation of certain important farm
products, and was asked by the Government to undert#2.!special
loans", inducingan
l emergency relief farm los in th TYBerated from
the Japanese, "small capital loans" in the areas recovered from the
.Communists, relief loans in regions flooded by the Huai. River and
Yellow River, and loans in the 'arm of agricultural supplies such
as chemical fertilisers aria processing machinery, furnished ty
UNRRA. Land credits were concentrated on the assistance of owner-
farmers and on land improvement, the latter making remarkable pro-
gress in response to urgent need in various provinces. The bank
also issued land debentures') in coordination with the enforcement
of land policy in the pacification areas2). Mach change has also
been witnessed in the types of business undertaken by the Trust
Department of the Bank. The purchase and transportation of raw
materiale, undertaken during the war years, were suspended while the
scope of the marketing of farm products was greatly enlarged. }.ore-
ver, the undertaking by the Farmers' Bank of the supply and sale
of agricultural products has had a far-reaching effect on the rehabil'
litation of rural esonomy.
The progress made in each of these various fields
since the Victory is treated under separate headings in the
following pages.
I. - Agricultural Loans
During the war, the Farmers' Bank laid special
stress on the increase of agricultural production, in order to pro-
vide.for consumption by the troops and civilians. Thus in the year
1945, during three quarters of which there was war, 54.45% of the
total amount of the farm loans was for the purpose of promoting
irrigation, and 26.79% for encouraging agricultural proauction, the
two items representing altogether 81.24% of the total.
In 1946, the year after the Victory, loans
for the marketing of agricultural products were increased to 22.39%
of the total amount of farm loans, in order to speed up the circu-
lation of the products, while the percentage of loans for promoting
irrigation and production dropped correspondingly. In order to
foster the export of special agricultural products the Farmers' Bank
also made loans for their warehousing and transportation, to the
amount of ON, 37,377,260,000 or 43.01% of the total amount of farm
loans.
EDITOR'S NOTESt 1) See Monthly Bulletin No.XVII (April 1948) Dc2a
ment No.93 "Land Debentures and the Encouragement
of Owner-Farmers in the Pacification Areas" by
Wang Fel.
2) i.e. area recovered from the Communists.
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Strong emphasis was again put on the export Cf '
special farm products in 1947, with a view to obtaining foreign
exchange for postwar reconstruction of the nation Loans for .agri-
cultural production and for the warehousing and transportation of
special products were greatly increased, the former representing
24.84%, anu the latter 39.95% of to total amount of farm loans.
(See Table II on the next page)
A comparison, of the loans outstanding at the end
of each year indioates the increasing demand for financial help
from the farms after the war, the figure for 1947 CN$ 876,400,000,000
being 10 timesthat for 1946, CN$ 6,900,000,000, and 170 times that
for 1945, CN # 5,100,000,000.
Let us now go into more detail concerning different
kinds of agricultural loans which for convenience will be grouped
under three headings namely: loans for important farm products,
loans in kind and special loans.
. 1. Loans for important Farm Products.
a) COTTOK.
The making of loans for cotton constitutes an im-
portant part of the loaning operations of the Farmers' Bank. In
order tO reduce the import figure and to curtail disbursements in
foreign exchange, the Chinese Government has been steadily endea-
vouring to increase the output of cotton in this countryli. When,
in 1947, the authorities established a Division for the Improvement
Of Cotton Production, the Farmers' Bank planned to lend CN 6 126,
000,000,000 during that year to encourage the production of American
cotton and longstaple native cotton, the beneficiary regions cover-
ing 13 provinces: Shensi, Honan, Kiangsu, Hupeh, Chekiang, Anhwei,
Elangsi, Hunan, Szechuan, Shantung, Hopeh, Shansi and Liaoning.
Am it turned out, CN# 115,000,600E000 were actually loaned to 12
provinces (Liaoning was excluded)), benefiting 3,870 Farmers'
AssOciagons and 1,340,000 cotton farms over a total area of 10,000,
000 mcwo!. The'aroas so helped yielded altogether 3,000,000 tan3)
Of raw cotton in 1947, representing 1/3 of the total output in the
whole of China during the same year.
EDITOR'S NOTES: 1) For details concerning the production and import
of ootton, see "Cotton Control in Chinas Its
many Difficulties" (Aonthly Bulletin, No.XVII -
April 1948 - Study XVI). Chapter I?Procuring
of Raw Cotton. pp.3 & 4.
2) Northeast Currency $ 45,000,000 was drawn from
other credit funds and especially appropriated
for promoting the,production of cotton in
Liaoning.
3) 1 mow = 6.7448 ares.
I tan = 60.479 kgrs.
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Table II.
Kind of Loan
Loans for agiicul-
tura' production
Loans for irrigation
Loans for agric.
development
Loans for the market-
ing of agric.produots
Loans for promoting
subsidiary occupations
of farmers
Loans for the ware-
houping & transporta-
tion of special agri-
cultural products.
Small capital loans'
Emergency relief farm ;clans
, in areas liberated from the enemy
Loans for the flooded areas
Farm Loans
At and of 1945
MS1,373,297,509
2,790,760,452
227,324,329
368,819,434
163,554,087
Agricultural invest- 210,809,765
manta
Total: 5,125,565,576
Outstanding at the 4d Of 1945, 1946 and 1947.
At end of 1946
At end of 1947
CL
0
77
Ri
C)
77
1]
co
5)
c)
c)
cr)
26.79
54.45
'4.44
7.19
3.19
3.94
100.00
0410,426,272,965
8,201,368,676
3,063,128,743
19,462,769,119
3,410,262,335
37,377,263,623
4,563,391,184
401,123,980
86,905,580,625
12.00
9.44
3.52
22.39
3.93
.43.01
5.25
0.46
100.00
04217,729,4841766
39,525,028,420
92,308,706,040
114,982,785,732
23,889,336,457
? 350,109,325,715
14,171,032,500
2,101,848,291
20,096,450,000
1,483,194,257
876,397,192,178
24.84
4.51
10.53
13.12
2.73
39.95
1.62
0.24
2.29
0.17
100.00
Note: Loans in the Northeast OurrenZy of $294,800,000 made in the northeastern provinces
in 1946, and $1,554,800,000 in 1947 (the amount outstanding at the end of 1947
being $1,452,936,414.53) are not included in the above list.
th
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Apart from production lcans, the Bank appropriat,
CN # 36,800,000,000 for the processing and marketing of cottca in
1901), 1)13 to the end of December 1947, CN0 26,551,000,000 were
lent to 144 Farmers' Associations, numbering 60,431 ginnery workers,
for the purchase of 225 sets of gins and 6 motors. It is estimated
that 730,000 tan of raw cotton were ginned.
b) SILK.
In view of the fact that silk is one of the main
export items and that its production affects the livelihood Lfan
important part of the rural population, the Farmers' Bank drafted
a systerdatic plan after V-J Day, in order to assist in the planta-
tion of mulberry trees, production of silkworm eggs, rearing cf
silkworms, baling of cocoons, purchase of cocoons, reeling and
marketing. Through the mediation of the China Silk Corporation,
the Farmers' Bank loaned CN$ 946,000,000 to 104 silkworm-egg
plants in Kiangsu and. 45 plants in Chekiang in the year l946.
Investigation teams were organizedby the authorities concerned
in 1947, in order to raise the quality of the eggs and eliminate
bad ones. After a 45 day survey in Klangsu and Chekiang, these
teams classified the planta in the 2 provinces into 5 classes ac-
cording to their equipment. 122 plants belonging to the 4 higher
classes were granted CN$ 6,500,000,000 up to the end of June 1947,
and as a result., 1,653,260 sheets of eggs were produced.
For the rearing of silkworms, the hank loaned
Clif 1,014,400,000 in the spring and autumn of 1946 to 680 farmer
groups in Kiangsu and Chekiang, comprising 74,400 silk-producing
families, and 264,800 sheets of eggs were produced. It approved
loans of CN$ 6,500,000,000 for the spring of 1947. Towards the end
of June, CN # 5,200,000,000 were actually issued to 816 Associaticns
-including 190,412 families producing 381,207 sheets of eggs. The
amount approved for autumn 1947, was CA* 5,000,000,000, while up to
the end of December 1947, CN# 4,500,000,000 were actually loaned
to 639 associations, comprising 65,951 families and producing 149,0'0
sheets of eggs.
A1MMICAN TOBACCO.
The Farmers' Bank started "American tobacco loans"
in March 1947, by approving CN$ 15,600,000,000 for promoting the
production of American tobacco and 014 12,400,000,000 for processing,
for the whole year of 1947, 'to be distributed in Honan, Anhwei,
Seechuan, Yunnan and Kweichow, with Pengpu (in Anhwei) and Hsuch'ang
(in Honan) as the dis:ributing centres. Up to the end of October
1947, CN$ 27,700,000,000 had been loaned to 38 hsiens2), benefiting
566 groups or 149,000 persons, over a cultivation area of-425,000
mows 33,000 tan of tobacco were cured and 117 curing chambers
repaired.
EDITOR'S NOTES: 1) The loans for the marketing of cotton from Shensi
- were issued jointly by the Farmers' Bank and the
Central Cooperative Treasury.
2) ?Hsien" means district.
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The Bank also approved loans amounting to CN$15,
000,000,000 for the warehousing and transportation of Ameri-Jan
tobacco produced in Anhwei, and loans amounting to CN $ 21,0O0,000,
000 for the same purpose for Honan, the money to be furnished from
funds reclaimed from the production and processing loans issued
previously.
2. Loans in kind.
a) CHEA1CAL FERTILIZERS.
Out of a tot:1 of 300,000 tons of chemical fer-
tilisers originally allocated by UNRRA to China, 70,000 tons were
to be distributed by the Farmers' Bank as loans in kind. Later,
the total allocation being cut down by UNRRA to 88,771 tons, the
amount entrusted to the Farm,:rs' Bank was reduced to 51,000 tons.
Up to the end of December 1947, altogether 33,080 tons, valued at
CN$ 46,300,000,000, had been issued to 966,000 farmers on 7,000,00C
mow of land in Kiangsu, Chekiang, Fukien and KWangtung.
b) PROCESSING MACHINERY.
The Farmers' Bank purchased in 1947 the folloaing
processing machines from the Ministry of Agriculture and Forestry:
15 sets of gins, 15 sets of baling machines, 20 sets of flour
mills, 20 Bets of rice husking machines, 20 sets of oil presses,
2 sets of medium-size oanning machines, 1 set of can-making ma-
chines, and 4 sets of 'machines for remaking used cans. The deal
was concluded at the original cost of the machines in US currency
plus transportation charges, the payment to be made in 7 annual
instalments. The Bank established ginning and baling plants at
Elating, Huangklou and Hsuchow (all in Kiangsu), Wukiang in Hohsion
(Anhwei), YUehk'ou, Fanchteng, and Ldohok'ou (all in Hupeh).
In cooperation with the National Agricultural
Engineering Corporation, the Bank is to loan 100 sets of machines
for manufacturing and repairing farm implements in Kiangsu, Hupeh,
Kwangtung and Kwangai. 8 sets have already been delivered in Nan-
king, 20 in Hsuchow, 30 in Chekiang, 20 in Hankow, and 20 in Canton;
and 11 sets have actually been loaned. The Bank possesses 2,000
modern hoes 141 of which have already been loaned to farmers.
3. Special Loans.
a) EBERGENCY RELIEF LOANS FOR RSCOVERED AREAS.
The Farmers' Bank was employed by the Government
in 1945 and 1946 to issue emergency relief loans amounting
CN$ 5,000,000,000 and Northeast Currency $ 260,000,000 to 15 pro-
vinces and the Northeast. When the loans were refunded in 1947,
they were again granted, benefiting more than 500 districts. Up to
the end of June 1947, the accumulated amount, including loans re-
funded and re-granted, reached 914 6,200,000,000 and NE Currency
$ 340,000,000. -
bl 'SMALL CAPITAL" LOANS FOR PACIFICATION AREAS.
In order to stabilise rural.eponOmy in areas just
recovered from the Communists, the Executive Yuan appropriated
CN$ 12,000,000,000 to be given through the Farmers' Bank as
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"small capital" loans to 109 hsienc in the 12 regions recovered
from the Communists in the 9 provinces of Elangsu, Anhwei, Sha,,-
tung, Hopeh Honan, Shansi, Jehol, Chahar and Suiyuan. Up to the
end of September 1947, CR; 9,380,000,000 had been distribut&d to
95,000 poor farming families. Later, an additional amount of
ON/ 12,000,000,000 was issued in the regions already mentioned
well as to 4 more pacification regions in Hupeh, Kansu, Ningsia
and Shensi, and the Mongolian banners in Jehol, Chahar and Sulynlln.
Up to the end of 1947, CN # 13,839,000,000 had been issued to 125,000
families in 134 hsiens and 15 Mongolian banners.
0) LOANS FOR HUAI RIVER FLOODED AREAS.
As the flood along the Huai River in the North-
eastern part of Anhwei was very serious in 1947, the Farmers' Bahk
was used by the Government to extend farm loans totalling CN# 3,900,
000,000, to cooperatives and other farm societies organized by
farmers in distress in 24 hsiens and municipalities for the specific
purposes of purchasing seeds, farm implements and livestock. The
loans attained the pre-fixed total amount at the end of June 1947,
benefiting 658 eocigties and 72,584 families, and greatly helpinE
agricultural rehatillitation in the areas suffering from the flood.
-d) LOANS FOR YELLOW RIVER FLOODED AREAS.
The Farmers' Bank received instructions from the
Government in 1947 to issue loans to promote agricultural rehabili-
tation in the former flooded areas along the Yellow River, the
amount of loans to be extended being fixed at CN # 5,800,000,000
for 15 hsiens in Honan, CR* 5,200,000,000 for 10 hsiens in Anhwei,
and CN 4 4,000,000,000 for 3 hsiens in Elangsu, totalling 014# 15,
000,000,000. These loans were either in the form of cash or of
seeds and farm implements. Up to the end of 1947, the Farmers'
Bank had actually issued a total of ON$ 6,126,000,000 to 194 grout::
end 33,313 families in 3 hsiens in Eiangsu and 4 beiens in Anhwei.
The work could not be carried out smoothly in Honan owing to the
battles raging there.
II. - land Loans
In conformity with instructions of the Government,
the Farmers' Bank established a Land Credit Department in 1941, to
undettake the business of a land bank, assisting the Government to
enforce the policy of "equalization of land ownership"). The
Bank is now extending land credits through 57 subordinate units,
including 17 branches, 7 sub-branches, 25 offices and 8 sub-offices.
The land credit business of the Bank thrived most
brilliantly in 1946. The outstanding balance of land loans granLed
by the Bank which was CN $ 316,757,154 at the end of 1945, jumped at
the end of 1946 to CN # 7,815,740,430 or 25 times the figure for the
EDITOR'S NOTE: 1) For interesting details and comments concerning
the Heque'lleation of land ownership" policy adopted
by the Chinese National Government, reference is
made to "land Reforms as Conducted by Nationalists
and Communists", by Wang Ebo-ting (Monthly Bul-
letin No.VII - April 1947 - Document 41).
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preceding year; while at the Lnd of 1947 it amounted to CN# 57,665,
822,225, only 7 times the figure for 1946. The reason for the
special boom in 1946 was that the total amount of land loans for
1946 originally fixed at CN$ 4,000,000,000, was later raised to
CN$ 7,800,000,000 in order to Meet the high demand during the re-
conversion period and also to make up for the loss of true value
of the loans resulting from rapid depreciation of the ON currency.
On the contrary, as a consequence of the "tightening-up" policy
adopted by the Government, the amount of loans for 1947 originall:-
fixed at CN $ 50,000,000,000 was reduced to CN$ 35,000,000,000,only.
To meet divers requirements, the loans were di-
vided into 7 kinds.
(See Table III on next page)
As may be seen from the statistics in the Table
-mentioned above, the land credits undertaken by the Farmers' Bar:
during the last three years, have leen mainly for land improvement
and the assistance of owner-farmers: the.former to help local
governments and individual farmers to improve the utilisation r.f
their land, and the latter helping to enforce the policy of
"tillers own their land". Thus the aggregate amount for these
two items outstanding at the end of 1945 reached 89.4% of the
total amount of land loans outstanding at the same date, this per-
centage being further raised to 98.61% in 1946 and 90.5% in 1947;
while on the other hand the other five kinds of loans added to-
gether represented only 10.6% of the total in 1945, 1.39% in
1946 and 9.5% in 1947.
?
1. Loans for Improving the
Utilisation of Land.
?
Loans to improve the utilisation of land were of
two kinds: those for increasing the fertility and_produotivity .
of farm land and those for relieving housing shortage in urban
areas.
The Farmers' Bank has made such effbrt to help the
farmers in Kaneu province to mix sand with their dry alkaline soil
for preserving water in it and making it productive. During the
five years from 1942 to 1946, the Bank financed the work of render-
ing productive a total of 119,675 ehih mowl) of land in 1 munici-
pality and 10 heiens of that province: Lanchow, Kaolan, Tsingyuan,
Iintlao, Ttaosha, 7ungteng, YUchung, Chingtlai, Yungtsing, Huang-
hilihsiang and Huining; 60% of the land being planted with wheat,
25% with cotton and the rest with vegetables and gourds, with an
annual output valued at CN$ 15,600,000,000.
The Farmers' Bank also assisted farmers to develop
waste lands. During the same period 1942-1946 (?)2), 600,000 shih
mow were reclaimed in Fukien, Kiangsi, Kwangei, Shensi, Hunan and
Ningaia, yielding an annual output valued at CN$ 6,000,000,000.
EDITOR'S NOTES: 1) 1 shih mow = 6.5567 axes.
2) This is only an interpretation, as the original
text does not clearly indicate the period.
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IN)
Table III. Land Loans Outstanding at the End of 1945, .1946 and 1947
land of Loan At end Of 1945 At end of 1946 At end of 1947
Loans for land ON$195,002,157
improvement
61.50
0146,826,673,410
86.94
ON$40,629,797,409.10
70.47
Loans to encourage
owner-farmers
88,246,564
27.90
915,995,357
11.67
11,551,006,901.61
20.03
co
0
Loans for compulsory
purchase of land
11,256,500
3.60
7,656,500
0.10
1,573,361,355.09
2.73
Loans for rearranging
land registere
9,411,000
3.00
75,000,000
0.96
3,686,000,000.00
6.39
Loans for registration
5,090,933
1.60
19,090,390
0.24
135,656,559.54
0.24
-0
& utilisation of pub-
lic property in towns
& villages ?
0
cb
0
co
Loans for purchase
of land
4,000,000
1.30
4,000,000
0.05
80,000,000.00
0.14
Loans for re-demarca-
tion of land boundaries
3,650,000
1.10
3,324,773
0.04
Total
316,757,154
100.00
7,851,740,430
100.00
57,655,822,225.34
100.00
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In the field of relieving housin3 shortage in
urban areas, the Farmers' Bank is -reported, in the last 3 years,
to have assisted 2,500 families of public servants, teachers alvi
Other civilians to construct new heases.
2. Loans for Assisting Owner-Farmers.
Loans for the assistanoe of owner-farmers are sub-
divided into the following 2 ctegories:
a) LOANS OF CATEGORY "A" issued to assist local
government3in purchasing land to be distributed to farmers. This
has been undertaken, since the Victory (?), in small selecteci areas
in Szechuan, Eiangsi, Kansu, Fukien, Hunan and NWongsi where
180,824 mow of land have been purchase [t for distribution among
8,780 farming families. (about 20-S0 mow for each). The propfw-
tions of .the work are shown in the following tab] e:
Table
istrict
IV.
District
Land Distributed to Famers in
the Various Model Districts.
.TiP?nd 41-.2.r.
trillpted(MOW)
To iro.,c'
fari--1:
Peiplei Experimental
(Szeohuan)
for encouragement of Owner-farmers
1,428
80
linghuchen Owner-farmers Model District
Hengyang,Hunan)
4,000
200
Chipu "
u
Ranhsien,Klangsi)
1,750
L150
Huangshihpling:
u
Nank,ang,Kiangsir
4,800
540
Shuinanhsiang
n
Shangyu,Kiangsi)
2,240
261
YUchow . "
u
Hsinfeng,Kiangsi)
4,500
598
Huanghuichiu "
m
Kansu)
41,850
1,263
Chruanhsien "
u
KWangoi)
2,906
495
Tattangheiang
n
Yulin,Kwangoi)
2,113
377
Yumahsiang "
m
Kweipling,RWangsi)
2,100
110
Lungyen u
u
FUkien)
114,137
4,584
b) LOANS OF CATEG?ff "BO made directly to farmers or
farm organisations to purchase land or to pay off high interest
rate loans. Altogether 47,67/ proprietory farming families in 7::
hsiens in Szechuan, Kweichow, Kwangsi, Hunan, Hupeh,--Kiangsu, Che-
kiang, Anhwei, Fukien, Riangsi, Ransu, Shensi and Kwangtung, have
been given financial help of this kind since the Victory, enri
699414 shih mow of land have been either purchased or redeeled.
In order to obtain more money for land loans, tht?
Farmers' Bank has secured authorisation from the Government to issue
3 kinds of land.debentures:
i/ The first kind, in denominations of $10d, $500, $1,000 and
$5,000, and totalling CN$100,000,000, was issued in 1942, bearing
an annual interest of 6%; both principal and interest are redeemable
in 15 equal annual instalments.
ii/ .The second kind, in denominations of S55,000, $10,000 and
$20,000 and totalling CN41,000,000,000, was iosued in 1946, also,
bearing an annual interest of 6%, but redeemable in 7 annual
instalments.
^
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iii/ The third kind, in terms of agricultural products, rill
be issued only upon instructions fivm the Government in coordina-
tion with the latter's land policy in areas recovered from the
Communists. These debentures in denominations of 1 shih tanl),
5 ehih tan, 10 shih tan, 50 shih tan and 100 shih tan of whet or
paddy rice, and totalling 10,000,000 shih tan of wheat and of paddy
rice respectively, will bear an interest of 4% per annum and will be
redeemable, principal and interest, in 15 equal annual instalments.
?
III. - Activities of the Trust Department
of the Bank.
The Farmers' Bank has established a Trust Depart-
ment with the aim of absorbing idle capital as trust deposits which
the Bank will invest in various kinds of useful enterprises, such
as the processing and marketing of agricultural products, the ex-
port of special products and the transportation of salt.
1. Processing and Marketing
of Agricultural Products.
The Trust Department of the Bank has been helping
the Ooverhment in stabilising commodity prices by promoting the
marketing of various agricultural products:
a) Several stations were set up by the Department,
in the autumn of 1946, in cotton producing regions in Shensi and
Hupeh, which, with a total capital of C14610,000,000,000, purchased
cotton and despatched it to Changsha, Hankow and Shanghai, to be
utilised by the cotton mills.
b) The Trust Department has also been producing-
soy bean oil and cakes in collaboration with the Tung He (Ch'eng
Mill in Chlangchow, Eiangsu. The soy bean cakes are sup-
plied to the sugar?cane farmers in. Taiwan.
c) Large quantities of timber have been purohased
by the Department in Honan, Eiangsi and Fukien and transported to
Cl Nanking, Shanghai and Ch'angchow for construction purposes.
d) With a view to promoting subsidiary occupation
in farms, the Department has invested CN6600,000,000 to purchase
straw plait and distributed it among farmers for making straw hats.
e) The Department in cooperation with the Yang
Peng Te Company, has undertaken the exchange of agricultural pro-
ducts, cotton goods and other daily necessities between the Northeast
and Shanghais the Northeast being rf.ch in agricultural products tut
short of cotton goods and other manufactured goods.
f) The Bank, in concurrence with farm organisations
in various regions, erected a National Agricultural Supply and Sales
Company in July 1947, with a capital of CN$2,000,000,000, and five
departments under its managements "cotton", "tea-tobacco", "oil",
"foodstuffs" and "supplies". The chief aim of this new institution
ia to promote the marketing of farm products.
EDITOR'S NOTE: 1) 1 shih tan = 50 Kgrs.
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2. Export of Special Products.
Since V-J Day, the-Trust Department of the Farmers'
Bank has been undertaking the export of Tung oil and raw silk, in
cooperation with the China Vegetable Oil Corporation and the Ch'ung
Yu and Ch'ien Shen Silk Factories respectively. Details concerning
this line of business are not available.
3. Transportation of Salt.
During the war years, the Trust Department of the
Farmers' Bank used to undertake the transportation grld_sale of salt
produced in Szechuan. After the Victory, however, the marketing
of Szechuan salt was much reduced in scale, acttvities centering
on the salt of Huai-an and Huaiyin in Klangsu anil that of Ch'anglu
in Hopeh, so as to meet the requirements of the -recovered coastal
areas. In 1946, the Bank collaborated first with the An I Trans-
portation and Sales Compann and later with the North China &all.
Company, in handling the marketing of salt in North China. In the
same year, it made investments in the Chung He Salt Company, an,'
handed over to it the marketing of the salt produced at Tzp1iuc2.in
in Szechuan.
( End 3
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1
-Shanghai
r
BM9EAU DE DOCUlaNTTION
-.Economio Chinoise)
280 Chungking Nan Lu (Dubail)
Tel :65761
The Rubber Industry in (.7hr:a.
R 0 R
STUDY NO.: XVIII
Number of pages: 14
Remarks: See 4 important
Appendices on p.10 ff.
Articles and repor digested and combined
in this Study:
"Tba Past and Present.of the Rubber Industry in Tsingtao",
by Lung She-ter the Tsingtao Rubber Factory quarterly,
No.1, May (?) 1947.
"The Tsingtao Rubber Factory during the First Year after
its Taking-Over", by Fu liang-yun, the Tsingtao Rubber
Factory quarterly, No.1, May 1947.
"A. Review of the Operations of the Tsingtao Rubber Factory
during the Past One Year and its Future Prospects", by
Chung Ch'i, the Tsingtao Rubber Factory (quarterly, No.1
May 1947.
Chemical Industries in the Past 10 Years", by En Pao-
?Wang, from "Chinese Economics during the Past Ten
Years" Vol.I, published by the?Chung Ewa Book Company,
1111amtbAi, Jan. 1948.
git biscussion on the Chinese Wober Industry", by Chlen
T'ao-sheng; Chin Yung Jih Pao (Shanghai), Feb. 26th 1948.
'Chung Nan Rubber Factory", by Hsieh I-ahung, the Industry
Monthly Magazine, Mar. 1st 1948. ?
"Plan for Developing the Rubber Industry", drafted by the
Shanghai Industrial and Commercial Guidance Bureau,
Shen Pao (Shanghai). Mar. 9th '1948.
'Rubber Industry in Shanghai", by Tu Shao-chun, Chin Yung
Jih Pao (Shangh0A), May 10th 1948.
'Rubber Industry in Taiwan", Ping Haien, Chung Yang
Jih Pao (Shanghai), June 14th 1948.
THE RUBBER .i.NDUSTRY IN CHINA
The manufacture oi rubber goods is one of the
only three light industries which enjoy a relative prosperity in
postwar China, the other two being the cotton textile and flour
industries. The past evolution and present conditions of the
rubber industry as well as the possibility of China's becoming-
self-sufficient in the supply of rubber articles, should there-
fore receive due attention from all interested in the economic
development of thia country.
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I. Distribution of Rubber Factories
in Various Parts of the Country.
The rubber industry in China has had a history of
30 years: the first rubber factory having been erected in Canton
in 1917. The industry was later developed in Shanghai and then
gradually expanded to other
A'
Shanghai.
The'rubber industry in Shanghai first saw light
in October 1921 when the Kiangwan Mo Fan (Model) Factory estab-
lished a rubber department produeing-tyres for rickshaws, toys
and soles. Owing to the competition ef foreign goods, however,
the rubber plant was closed down not long afterwards.
A solid foundation for the industry was only lald
down seven years later when, owing to the increasing demand for
rubber overshoes four rubber goods factories, I Chiang, Ta ChunF
Hua (Great China), Wu Pen and Ya Chou (Asia), sprang up in 1928;
and the I Sheng and many other plants came into being in 1929.
Rapid progress was achieied in the following two years sothat
the city already counted more than 40 factories for rubber articles
in 1931.
&decline was seen however in 1932. Most of the
factories directly or indirectly suffered losses from the battle
raging in the Shanghai areas that year. By 1937, twenty-seven new
factories had been established while 32 old factories had ceased
operating. After the outbreak of the war, 60 to 70% of the rubber
plants'in Shanghai, mainly scattered in Chapei, Hongkew, Nantao
and the western sectors, were demolished by gunfire, looted or
occupied by the enemy. Some plants succeeded in moving to the
interior, while those operating in the International Settlement
and the French Cenceasion ware able to survive until Pearl Harbour
when the supply of both rubber and power was cut off.
After V-J day, many rubber factories were moved
back to Shanghai from the interior. The industry, nevertheless,
remained dormant on account of the prevailing international con-
trol of the supplies of raw rubber. It was not until March 1947,
when the Ministry of Economics allocated 100 tons of rubber to the
various plants that the industry began to revive.
There are now 84 factories in Shanghai, possessing
50% of the nation's machinery for manufacturing rubber goods 1).
The largest of these factories, are reviewed below:-
a) Ta Chung Hua Rubber Industrial Co., Ltd.
This is the biggest rubber goods manufacturing
company in Shanghai, managing altogether 8 plants: 5 rubber fac-
tories, 1 machine works, 1 calcium and zinc plant and 1 dyeing
EDITOR'S NOTE: 1) For detailed statistics on the equipment and
monthly production of the rubber plants in Shang-
hai as well as their monthly requirement of raw
materials, see hppendices oh P-10 ff.,
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.1 11..111 it Pell. .1.04111410.4.f a. 04N. MOM K Or
& weaving plant.
The products of the Company cover "Shuang Ch'ien"
or "Double Coinu brand automobile tyres, bicycle tyres, rickshaw
tyres, pedioab tyres, rubber shoes, overshoes, rubber pipes, hose,
rubber gloves, inner bladders for balls, rubber insulated wire, ht
water bass, rubber belts, etc.
Plant No.1 produces monthly 500,000 ;airs of rub-
ber shoes, 20,000 sets of bicycle and pedicab tyres; .5,400 seta of
rickshaw tyres, 2,600 sets of automobile and aeroplane tyres.
Plant No.2 produces monthly: 290,000 pairs of overshoes; and
70,000 pairs of rubber shoes with canvas uppers. large quantities
of rubber :aloes and overshoes Pre being produced by other branch
plants.
This Company 1ms opened business offices in Ban-
king, Hankow, Nanchlang, Changsha, Chungking, Wenchow and Canton.
A new office is being.established in Tientsin, and others will be
set up in Taiwan and the Northeast.
b) Cheng Tlai Rubber Factory.
This factory, equipped with 43 mixers, 6 calendrrs,
lb steam autoclaves, 32 vulcanisers, 2 rubber belt presses and
numerous other accessory machines, is reported to produce dailyas
much as 30,000 pairs of variouskinds of rubber shoes, overshoes,
boots and shoes with canvas uppers; 1,000 sets of tyres and tubes
(tyres and tubes for bicycles, pedicabs, rickshaws and automobiles);
and 60,000 inch-ply belting for belts and V-belts. Other products
are rubber soles and'heels, rubber gloves, hot-water bags and
? rubber insulated wire. All these articles bear the "Hui Li
Ch,iun or ',Warrior" brand.
- Business offices of the Factory are distributed
in Nanking, WUhsi, Hangchow, Tientsin, Canton, Swalow, Hankow,
Chungking, Mnkden, Elangsi and Hunan.
c) I Shang Rubber Factory.
This factory, possessing 16 mixers, produces .
annually: 3,600,000 pairs of rubber overshoes; 2,000,000 pairs of
shoes with canvas uppers; 300,000 sets of tyres for bicycles,
rickshaws and pedicabs. Among other products are rubber gloves,
soles and heels. All its products bear the famous "Chien Ku"-or
"Arrow and Drum" brand.
d) Chung Kuo (China} Shen I
Rubber Belt Factory.
This was established in 1933 and was the first
Chinese factory to manufacture rubber belts. Its monthly output
is 3,300,000 inch-plies for belts. It is said that these belts,
made with'canvas of excellent quality, are highly elastic and last
very long; furthermore, being sold at a reasonable price, they find
a good market in all big porta in this country as well as in the
South Pacific Islands.
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e) 141Ljilliag, Rubber Factaray.
This rubber factory, equipped with 7 large mixers,
6 small mixers, 4 steam autoclaves, 1 boiler, and 300 HP motors,
produces each month 12,000 dozen pairs of rubber overshoes and
6,000 dozen pairs of rubber shoes wj.t.h canvas uppers.
f) Ta T'ung IndustriAl_gloaa_I&A.
This Company has a rubber factory located at 300
Yangtzepoo Road, whinh possessen S mixers and 400 HP motors and
produces "San Yuan" brand tyl..a.,.a ebonite fountain pen cases, roll-
ere, soles and heels and other :101-;er articles.
g) laya_ElagaRataAer .:!vods kanufactorY.
Plant No.1 is located at P'an Chia XIII on Wu I
Roads plant No.2 at 272-282 Xiaogwan Road and the newly established
Plant No.3 at 141 Chung Shan Road (W), each of the three covering
an area of about 7 mow 11.
Their equipment consists of: 13 mixers,
8 calonders,
1 horizontal boiler,
3 vertical boilers,
5 rubber shoe dryers,
1 waterproof cloth dryer,
4 friction machines 24
1 spreading machines
9 machines for stirring latex,
1 machine for cutting rubber,
50 aewing machines and
other accessory machines.
h) yanakaaajaar_i3ang Woo) _Industrial Co. .Ltd.
This Company was founded in 1918. The rubber
department of its Plant No.2 is engaged in manufacturing *Yung"
brand overshoes, balls, hot-water bags. It has opened business offices
in Nanking, Tientsin, Hankow and Hongkong. ?
After reviewing the comparatively large rubber
factories in Shanghai, it may 'e interesting to know the total '
number of persons engaeed in tne industry in this city, as tech-
nicians, workers or ordinary staff wembern:
Technical staffs : 420 -
Ordinary staff 1,034
Technical workers: men 3,804
women 3,989
children . 84 7,877
Ordinary workers. men 3,396
women 3,144
children 177 6,717
Totals 16,048
EDITOR'S NOTES: I) I mow = 6.74 ares.
2) The friction machine ferces the rubber into the
textile fabric usea as a foundation.
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.2h Tientsin and Peiping;
Tientsin counts 57 rubber factories, the largest
being I'T'ang (possessipg 307 HP motors), Chen Chung (200 HP), Ta
Lu (273* HP), Ybeh Hda (166 lili and Hein Tientsin (191* HP); while
Peiping has only 5 rubber factories, the comparatively important
ones being the Hain Hua (91 HP) and Chli Hein (84 HP).
The main products in these two cities are bicycle
tyres and inner tubes. The number of factories engaged in manu-
facturing each particular kind of rubber goods is shown in the
following table:
Bicycle tyres 41 factories
? Soleo 21 "
Bicycle inner tubes 20 "
Tyres for vehicles (other
than bicycles & motor cars) 14 0
Shoes 7 II
V-belts 6 u
Motorcar inner tubes 5 u
Hose pipes 5 u
Balls 4 0
Inner tubes for vehicles
(other than bicycles &
motor cars) 4 0
Belts 3 11
Rollers 2 ?
Motorcar tyre lining 2 u
Insulating cloth 2 u
Heels 1 n
Rubber electric accessories 1 u
Football bladders 1 u
Basket balls 1 u
Medical tools 1 u
The I T'ang Rubber Factory, whioh produces "Wheel"
brand bicycle tyres and inner tubes and rubber shoes, is now plan-
ning to increase its output of rubber shoes with canvas uppers in
ordar to meet the huge demand of the troops massing on the battle-
fields in North China.
The factories in Tientsin and Peiping are reported
to require 771 tons of raw rubber every month. 1)
3. Tsingtao.
The rubber industry of Taingtao dates from 1930
when the Japanese-owned T'ai an and Ta Yu rublyar factories came
into being. The Chinese started building up their own factories
in the following years: the Lung Yu rubber factory in 1930; the
T'ung T'ai in 1932 and the Shantung in 1936. Soon after the
Chinese Government raised the customs duty on imported rubber
goods from 17.5f to 30% in 1933, more Japanese came to Tsingtao and
breeted large rubber factories there, namely: Bridge Stone and
EDITOR'S NOTE: i) For a detailed list of the quantities of raw
materials required by the rubber factories in
these two cities, see Appendix IV. on p. 14
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Japan in 1935, Hsing Ho in 1936 and Kung Ho in 1938.
It is reported that the output of tyres in '....sinz-
tao before V-J Day represented 50-70% of the total output in North
China; of inner tubes, 30-60%; of rubber shoes, 90%.
After V-J Day, the Bridge Stone Rubber Factory wa.-.
taken over by the Chinese authorities and placed under the manage-
ment of Ch'i Lu Corporation. Now it is functioning under the new
name of the "Tsingtao Rubber Factory". The former Ta Yu Rubber
Factory resumed production at the beginning of 1947, under the
management of the Military Headquarters. The T'ung T'ai is pre-
paring to resume operation. Other plants have sustained such great
damage that they cannot be expected to re-open in the near future.
? Things being thus, the present output of tyres
from the factories in Tsingta..; cannot be more than 60% of what it
was before V-J Day and their output of rubber shoes is about 90?.
of the past production. The present annual production may there-
fore be estimated as follows:
Bicycle tyres
Bicycle inner tubes
Motorcar tyres
Motorcar inner tubes
Rickshaw tyres
Rickshaw inner tubes
Rubber shoes
1,500,000
1,750,000
72,000
72,000
223,200_ , W.
684,000
8,604,000 pairs
It seems that these figures will remain appro-
ximately the tams for the next two or three years.
The Tsingtao Rubber Factory which is the largest
of its kind in this port, consists of three departments: the tyre-
making department, shoe-making department and weaving department.
Working at full capacity, it could attain the following annual
output:
Item Annual output capacity
Bicycle tyres 1,200,000
Bicycle inner tubes 1,800,000
Motorcar tyres 50,000
Motorcar inner tubes 40,000
Rickshaw tyres 150,000
Rickshaw inner tubes ' 250,000
Rubber shoes 6,000,000 pairs
Conveyor belts 20,000,000 plies
V-belts. 80,000 "
Rubber rollers 30,000
d'he products of this factoiy still bear the former
"B.S." brand and, besides meeting the local consumption, are sold to
Kiantsut Chekiang, Anhwei, Hupeh, Aiangsi and Taiwan. Large'11..nti-
q
ties"of rubber shoes are supplied to the armed forces of the
4. Other Parts of the Country.
a) TAIWAN: This island counts 48 rubber factc7ies;
.1 operated by the provincial government and 47 owned by private:
concerns, scattered in Taipei, Fengyuan, Changhua, Hsinchu, Kau-
-htiang and Tainan. Theyptaaem3altogether 141 mixers and produce
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more than 50 kinds of rubber goods, the most-important being tyres,
shoes, boots, rollers, hose pipes, waterpipes and gloves.
The Taiwan Rubber Co., Ltd. operated by the pro-
vincial government, is the lar6a5t of all, its production capacity
representing more than 60% of that of the whole island. It is ab]1
to produce at present about Taiwan Currency $90,000,000 worth of
rubber goods every month, which is said to be equivalent to 130% of
the amount of production of the same Company under Japanese manage-
ment. Its output and sales of tyres, shoes and boots in August,
Septaber, October and November 1947 were recorded as follows:
Tyres and Tubes (for bicycles and motorcare;
August 1947
September 0
October
November "
Shoes and Bootg
Output
2,786
2,877
5,186
6,147
Sales
(including sports shoes
and boots, long and sh
1,430
3,724
4,299
2,759
, rain shoes
ort bootsi,etc.
Output
20.11
August
1947
29,380 pairs
26,715
pairs
September
"
28,967 0
52,600
"
October
a
32,631 "
37,338
November
"
35,639 "
28,580
"
b) CANTON: Notwithstanding the fact that Canton
is credited with being the first place in China where a rubber
factory was ever erected, the development of the rubber industry
in this city has been frustrated by the competition of rubber fax-
"tories in Hongkong which enjoy a definitely more favourable- posi-
tion both for supplies of raw materials and for sales to various
markets. Though the city counts more than 200 rubber plants at
present, most of them operate on a rather small scale. The Canton
Rubber Industry Guild is reported to have only 61 meMber factories,
operating altogether 112 mixers. Their principal products are
rubber shoes which are sold, mainly in KWangsi, Kiangsi and Hunan.
C) CHUNGKING & KdEIYANG: There are altogether 6
plants in Chungking and Kweiyang, operating 32 mixers. The Chung-
king branch of the Chung Nan Rubber Factory (with its head office
in Shanghai) is the largest of all, producing daily 8,000 pain.:
of rubber shoes and 70 dozen bladders for balls. The daily output
of shoes can be rai,3ed to 10,000 pairs provided that electric powcr
is regularly supplied. The Aweiyang branch of the same Factory
is manufacturing mainly spare automobile parts, electric fan belt3,
bladders for balls and hose pipes.
d) NORTHEAST: The Mukden Rubber Goods Factory
in Mukden, under the management of the National Resources COMNiS-
sion, possesses 42 mixers; the Mukden plant of the Northeast Pro-
duction Admipistration possesses 22 mixers; the Uniform Plant
under the Military Headquarters has 26 mixers and the 3rd Auto-
mobile Parts Plant of the same Headquarters has 7 mixers. But
owing to disrupted communications and lack of raw materials, their
output of rubber goods is very limited.
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II. - Raw Haterials,Machinery
and Self-Sufficiency.
Though the rubber industry in China has a fairly
good foundation, it is as yet unable to supply the nation with ell
thdbrubber articles needed. This is clearly demohstrated by the
sizable imports of rubber goods in last two years:
Import of Tvres
1947
December 1947
From:
1946
USA
79,355
216,982
5,790
India
12,327
15,793
1,940
France
2
7,381
3,542
Great Britain
2,028
5,273
810
Hongkong
306
198
25
TOTAL
96.600
246.968
12.150
?
From'
Import of Inner Tubes
December 1947
. 1946
1947
USA
59,893
94,631
4,759
India
4,214
10,608
1,978
Franne
2
7,442
3,536
Hongkong
31
3,665
3,626
TOTAL
67.7
121.790
15.930
Zmport of Rubber Boots and Shoes
(including soles and heels)
(unit pairs)
1946 1947 December 1947
From:
Hongkong 950,424 1,986,328 200,450
USA 973,631 401,331 492
Straits Settle-
ments & F.M.S 34,593 4,105 650
4.0
TOTAL 1.997.877 2.403.871 201.624
The reason for this failure to attain self-
sufficiency, lies chiefly in the lack of raw Materials and in a
few cases also in the lack of machinery.
China, not producing raw rubber herself, needs to
import about 4,000 tons monthly to feed her rubber industry. Yet,
.with a view to curtailing its disbursements in foreign exchange,
the Chinese Government has been inclined, to cut down the quota for
the import of raw rubber which has become inadequate to meet the
requirements. Thus the import of raw rubber in December 1947 was
reduced to only 1,704 metric tons.
The followir?; table shows the import of old, waste
and raw rubber during the years 1946 and 1947, and in December 1947:
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Impart of Old. Waste and Raw Rubber
From:
194m 1947
December 1947
Straits Settle-
metric
ments & F.M.S.
5,548 tons 20,453 m.t.
853.7 m.t.
USA
8,384 14,776
565
Hongkong
5,452 2,043.5
235.8
Indo-china
1,073 792
37.6
Netherlands
'
East Indies
2.2 5
5
000
TOTAL ?ajar? 2G757- 1.2.2_94
Besides crude rubber, many other raw materials are
required, such as zinc oxide, carbonate, stearine, lithopone,
graphite, sulphur, accelerators 1), anti-oxidants 2), pine tar,
Turkey red oil, carbon black dyestuffs, linseed oil, gasoline,
fuel oil, paraffin, vaseline, .sgnesium oxide, paper, etc.
. Zino oxide is produced in this country, but in
insufficient quantities. The Raw Material Plant No.1 of the Ta
Chung Hua Rubber Industrial Co., Ltd., the Ktai Lin Paint Factory
in Shanghai, and the Kuo T'al Industrial Co. in Hengyang (Hunan)
produce at present about 160 tons of zinc oxide each Donth. The
monthly output can be raised to 340 tons in the future.
. The domestic supply of calcium carbonate and
atearine comes very near to the amount consumed. A total of 700
to 1,000 tons of calcium carbonate is produced monthly by the Ri?w
Material Plant No.1 of the Ta Chung Hua Rubber Industrial Co. Ltd.,
the She? Hsin Chemical Works, Ltd., the Mei T'ai Chemical Works,
the Ching Hua Industrial Co. and the China Brick and Tile Co. all
in Shanghai. A total of about 80 tons of stearine is produced
every month by the Chung Fa Olein Factory and the Chung Hua Olein
Factory in Shanghai, and the Ch'ing Ming.and.the Yu Fa Chemical
Works in Wenchow (Chekiang). . .
The other raw materials are. either not produced
in this country or produced only in very small quantities, lao that
rubber goods manufacturers have to rely upon supplies from abroad.
Besides raw materials, the problem of installing
modern equipment also calls for attention. It is certain that In
the past restrictions by the Government on the importation of mach-
inery'have been an obstacle to the efforts of some industrialists to
augment the production of rubber goods and to improve their quality.
For instance, both the Ta Chung Hua Rubber Industrial Co. Ltd. aid
the Cheng 'Pei Rubber Factory in Shanghai, shortly after the
Victory, placed orders abroad ;or modern machines which were ready
- - - -- ---
NOTES: 1) Accelerators: formerly litharge, lime and magnesium
oxideu were used but they are now commonly replaced by
organic compounds Such as MERCAPTOBENZOTHIAZOLE (Captax)
DIPHEAYLGUANIDINE, TETRAMETHYLTH1URAMDISUIPHIDE (TUADS)
and ZINC DILJETHYLLITHIOCARBAMATE (ZIMATE)
2) Antioxidants: usually 4.T.D0ZALMMANA.PHTHYLAILINE Or
PHENYL BETANAPTRY14.0mg.
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I ' ?
002-1
to be shipped to this country. But their application to the Gov-
ernment authorities for foreign exchange for the imports did not
succeed and the whole affair was suspended. It must be pointed
out, in thie connection, that if 200,000 sets of motorcar tyres
and tubes arc imported annually and if each set costs US$50, China
will have to spend U8410,000,000 every year or US$30.000,000 in a
period of three years. It is estimated that if a sum of US430,C00,
000 is used to buy modern machinery for the manufacture of rubber
goods and if the:import quota of raw rubber is raised at the same
time, China will be able to produce all the rubber goods her
people needs.
Appendix I. - Mixers Possessed by the Various
Rubber Factories in Shanghai.
Size
22" x 55"
20" x 55"
, 18" x 48"
a.
Number
of sets
2
1
9
Amber of Old Mixers.
Monthly Re-
quirement of
raw rubber, each
15 tons
15
10
Total monthly
requirement of
raw rubber
30 tone
15
90
16-1/8" x 301i"
1
7
7
16" x 48"
2
7
14
16" x 440
6
7
42
160 x 42"
2
7
14
16" x 40" .
4
7
28
16" x 39"
1
7
7
.16" x 32"
2
7
14
15+"x 30i"
1
5
5
14" x 40"
1
5
5
14" x 38"
4
5
20
14" x 36"
236
5
1,180
14" x 34"
16
5
80
14" x 32"
13
5
' 65
14" x 30"
a
5
40
14" x 28"
2
5
10
12' x 30"
21
3.5
73.5
12" x 28"
26
3.5
91
12" x 27"
2
3.5
7
12" x 26"
4
3.5
14
12" x 25"
1
3.5
3.5
12" x 24"
14
3.5
49
100 x 26"
1
3.5
3.5
10M x 24"
4
3.5
14
TOTAL:
384
lalgal tons
ad.* .10.04....4111.01!
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b. Number of Mixers Newly Installed
02-1
Plant
TYPe
BUmber
Ta Chung Hua No.1
10" x 19k
No.2
16" x 420
1
No.3
14? x 36"
2
18" x 48"
2
No.4
14" x 36"
Chen Hua
11i0 x 28"
1
Shih Sheng
14" x 36"
2
Ch'in Kung
14" x 36?
6
Tung Hai
14" x 36?
1
Ta Ya
14" x 36"
3
Hue Nan
14" x 36"
2
Chien Hua
12" x 28?
1
Ch'i Chiang
14" x 36"
2
Li T'ai
16" x 44"
6
14" x 36"
2
Nan Yang
14" x 36"
2
Shuan Lung
14" x 36"
1
I Sheng
18" x 40"
'
1
Ta Heing
14" x 36"
1
Te Hain Hsing Chi
18" x 40"
1
12" x 28"
1
Hua Hsing
12" x '28?
1.
Kuangtung
114" x 24".
Chung Kuo
14" x 36"
'
2
WV Chow
14" x 36"
Hung Ta
14" x 36"
1
No.2
14" x 36"
2
No.3
14" x 36"
8
Chung Nan
14" x 36'
2
Ta Lu
14" x 36"
2
Shanghai Rubber Plant
under the Navy
14" x 36"
6
TOT4:
Appendix I/. - Monthly Production of
Rubber Articles in Shanghai.
a. Total Monthly Output of Various
.161.111-0
, Tyree for bicycles, pedicabs and rickshaws
Inner tubes of tyres for bicycles,
pedicabs and rickshaws
Automobile tyres and inner tubes
Rubber wheels
.Rubber for mending tyree
Shoes with canvae uppers
Soles
Soles for sports shoes
?
Rubber Goods.
genthlv 04cut
54,915 pairs
83,742 "
4,800 sets
540
1,000 pounds
4,022,043 pairs
90,650 pounds
21,365 "
NOTE: The Hua Fu has transformed its 9-P x 24" wdxer into a
10i" x 24" one and the Huan Chtiu its 14" x'36" into
a 4.1" x 36" one.
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C
Item
Heels for shoes
Overshoes
Boots
Printing rollers
Printing and dyeing rollers
Roller for paper making
Rubber rollers
Roll mills
Rubber hose pipes
Rubber belting
V-belts
V-belts for machines
Ebonite
Ebonite fountain pen cases
Ebonite covers for switches
Ebonite battery cases
Telegraph wires
Wire insulated with rubber and c9tton
Wire insulated with rubber only
Rubber wire coils
Rubber for covering wires
Rubber insulating tape
Rubber sponge
Pumps
Pedals
Rubber erasers
Hygienic appliances (e.g. gloves)
Hot-water bags
Balla
Inside bladders for balls
Rubber tubing
Rubber thread
Rubber bands
Thin rubber sheeting
Spare pazts
Pressed and refined rubber
Regenerated rubber
50002-1
Monthly Output
.17.426 dozen
871,378 pairs
10,400 "
216
71
1
1,523
300 pairs
449
(total length:17,300 ft)
(total weights34,009 lbs)
4,296,981 inch-plies
6,000 feet
6,512
10,986.25 pounds
15,000 pounds
120 dozen
115
14,000 ooils
6.723
3,662
13,585 pounds
17.000
10,000 dozen
15,000 pounds
150 dozen
600 gross
5,367 pounds
5,000 dozen'
2,185
146,024
100
1,400
18,140 pounds
7,569 "
35,840 yards
3,000
(total weights30,860 ).bsly
7 tons
12 "
b. Output of V-Belts from Various Factories.
Name of Factory
Central Chemical Works
under the National Re-
sources Commission
ivverage monthly Makimum montIllv
Output 22IELAI
500,000 inch-
plies
1,000,000 insh-
plies
Ta Lai Industrial Co.
558,331
' 800,000
Chen I Rubber Belt Fty.
251,812
503,625
Wu Chow Rubber Goode Pty.
129,427
500,000
Meng T'ai Rubber Pty.
129,242
1,300,000
TOTAL
1,378,812
3,,03,625
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)i
C.
Name ef Factory
Output of :libber belts from
Various F:_ctories.
Shen I Rubber Belt Fty.
Chang T'ai Rubber Fty.
Chung Nan Rubber Pty.
TOTAL
Average monthly Maximum monthly
output output
2,268,314 inch- 3,500,000 inch-
plies plies
1;345,478 14,000,000
800,000 1,200,000
4,413,792 18,700,000
Appendix III. - Monthly Requirement of Raw
Materials for the Rubber
Industry in Shanghai.
(According to current information)
Oripinating in Monthly Rectuiret
South Pacific islands,
Singapore.
USA
USA
Shanghai
USA, China
North China,Shanghai
Norway
USA, England
USA, England
Taiwan, USA
Norway
South America, USA,
Tientsin
Shanghai, USA
Shanghai, USA, England
Belgium Holland.
USA
Chekiang
USA
Shanghai, USA
USA.
USA
Shanghai, USA 1.8 "
USA 18 "
Shanghai, USA 25,000 gross
Shanghai, USA 108,000,000
USA, Shanghai, Chung- . 36 tons
king, Wenchow.
Hunan, Taiwan, USA
USA
Shanghai, USA
USA
Item
Raw rubber
Accelerators
Anti-oxidants'
Calcium carbonate')
Carbon black
Coal
Copying paper
Fuel oil
Gasoline
Graphite
Draft paper
Linseed oil
Litharge
Lithopone
Machine oil
Magnesium carbonate
Magnesium oxide
Manila paper
Oil black
Paraffin wax
Pigments
Pine tar
Press buttons
Shoe eyelets
Stearic aoid
Sulphur
Vaseline
Zinc earbonate
Zino oxide
1,800
27
18
1,800
450
3,240
45
1,800
270,000
200
100
45
64
tonc
gallons
tons ?
270 "
27,000 gallons
- 90 tons
9 .!
36 "
3.5 "
36
54
18
18
450 "
NOTE: 1) According to other reliable estimates, the actual
eumption is not likely to exceed 350 tons.
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Appendix IV. - Monthly Requirement of Raw
Materials for the Rubber Industry
in Tientsin and Peiping.
(cf. Rubber Industry Guild of Tientsin and Peiping)
.111M Monthly Reouirement
tons
u
w
d
o
"
gallons
tons
if
gallons
tons
II
II
lbs.
tons
"
u
grains
tone
n
u
u
u
0
Raw rubber
771
Accelerators
4.2
Anti-oxidants
8
Calcium carbonate
771
Carbon black
192
Copy paper ?
19
Gastaine
5,400
Lithopone
" 115
Litharge
. 23
Machine oil
5,400
Magnesium carbonate
58
Magnesium oxide
4
Manila paper
15
Oil black
1,400
Paraffin wax
15
Pigments
0.8
Pine tar
8
Shoe eyelets
10,350,000
Stearic acid
15
Sulphur
23
Titanium oxide
8
Vaseline
8
Zinc carbonate
8
Zino cxide
192
( Find )
WONTRLY BULLETIN N0.X1X - June-July 1948 - STUDY XVIII - Page 14
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.. f i06140101,404144.41101/1144F. , . 10. VINO "PI* 041 1.9011. 4.41
UNIVERSITE LIAURORE
-Shanghai-
BUREAU DE DOCUMENTATION
(Economie Chinoise)
280 Chungkimg Nap. Lu (Dubail)
?Tb1i85;163.
? 'jv
"
Rules Governing the Application of
the Revenue Stamp Duty Maw
Promulgated by the Executive ''an
on the 20th of April, 1948;
Annex No: LVII
Annex Coneerneds No. LVI
Published in the Weekly Reriew of Number cit pages: 5
Laws (Fa Ling Chou K'an),
May 5th 1948. Remarks: Translated by our
Legal Department.
RULES GOVERNING THE APPLICATION
OF. THE REVENUE STAMP DUTY LAW
Article 1.
These Rules are laid down in accordance with the
provisions of Article 31 of the Revenue Stamp Duty Law (hereafter
mentioned as THIS LAW.
Article 2.
The organisation appointed by the Ministry of
Finance to issue revenue stamps shall contract with post offices,
public and private banks and other properly constituted juridical
persons, for the sale of the stamps on ()omission. It shall give
to these sales agents a oommiesion of from two to five per cent,
to be deducted from the receipts from the sale of stamps. But each
month a statement of the amount of the commisaion must be prepared
and sent to the organisation which issued the stamps, together with
a receipt for the revenue stamp duty paid. These shall then be
audited and the corrected accounts sent to the Treasury.
Article 3.
The 'educational, cultural or oharitable institu-
tions and cooperative societies? mentioned in item 6 of Artiole 4
of this Law shall all be institutions or juridical portions estab-
lished in conformity with the law.
Article 4.
The 'duplicates or copies!" mentioned in item 7 of
Article 4 of this Law Shall be those only which bear *meetly the
same contents as the original document upon which revenue stamps
have already been affixed.
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Artiele 5.
The idoeumenes ueee internally, not involving any
external eb:eeateoese, eentiereel en item e of Article 4 of this
Law, shall be deouments used by an institution or organisation wi-
thin ite owe ofeeces for mutual neteficaeion between various depart-
ments. Doeumenes exchengee by the branch offices and head office
of an institution or organisation shall not be regarded as documents
issued for internal uee.
Article 6.
The ebills pressine for the payment of debts",
meetioned in item 9 of Aette- 4 of this Law, shall be overdue
aecount bille eeeee! at the ple-deteemaned time of payment or
aceerding to etas-jeer, oe the oeneeiors of the New Year or of /esti-
vaes, and only eieleg tae smuefei of the debts. But bills speci-
fyiag remes, eeantitiee and eeleee of articles, which are sent to
customees requesting them eo ;ay their accounts without the issue
of any other invoiee or recelet for exaney, shall not.be regarded in
this sense ae bills pressing for the payment of debts.
The-"billo awed for the auditing of accounts" men-
tioned (in teas same item of the ewes Artecle) shall be statements
issued by benking institutions er ecmmereial firms to their customers
for the purpose of eheceene any errata in the payment and receipt
accounts.
Article 7,
When as mentioned in the second paragraph of
Article 6 of this Law, the revenue stamp duty for commercial
documents has been paid in a round sum, if there has been any pay-
ment in exness, no application may be filed for refund.
Article 8.
Where any document drawn up outside the oountry
is used as mentioned in Article 11 of this law, the person using
it shall be held liable for affixing the revenue stamps.
Article 9.
When in conformity with the provisions of article -
14 of this law, a government office or school issues any document .
which is subject to revenue stamp duty, and tee recipient has been
made to affix the appeoeriate amount in revenue stamps, it shall
also verify that the amount e. eeamps affi.xed is correct and that
none of the starpe have been eemoved (from another document) and
used again, and chall require any neeessary readjuetments to be made
immediately. If any doeement is issued without revenue stamps
being affixed theren or if' the document is stamped without the
necessary readjuetmente, the resulting responsibility (or' violation
of the law shall fall upon the pereon who issued or stamped the
document.
Article 10.
Where accordine to the provisions of this Law, the
recipient of a deeument should deduet the cost of the revenue stamps
he has affixed c! behalf of (the party issuing the document), if
there is any vieistion of the law, the resulting responsibility
shall fall upon ei.e reeleeent.
Article 11.
Th6 "effieeal eriee" mentioned in Article 15 of
this law shall mean the pr ?e approved or decided by government
e,
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authorities. Where there is no offic:;.al price, the current prise
on the local market shall be taken as basis.
Article 12.
The names of documents given in the Annotation
column of the Table of Duty Rates of Article 16 of this Taw are
only explanatory examples given for each category of documents.
Those documents Which are definitely of the sane nature as the
documents in a certain eategory, even though not cited among these
examples, shall still have revenue stamps affixed on them according
to the duty rate prescribed for that category. Where the nature
of a document cannot be positively decided, the case shall be re-
ported to the Ministry of Finance for decision.
Article 13.
. Any public er private enterprise or business
organised as a Company, which has not yet issued formal share cer-
tificates, must affix revenue stamps to the temporary receipts for
money received for shares or. for incroase.of capital, as is done
on receipts for money. They may alternatively be affixed collect-
ively on the account book for registering capital, but if they are
affixed collectively on the account book for registering capital
an explanatory note must also be added to the temporary receipts.
Artiele 14.
The "dooument of principal debt and document of
accessory debts" mentioned in the third paragraph in tt.e Annotation
column under item 6, uContracts of Loan or Indebtedness or Deeds
of Pledge" of the Table of Duty Rates of Article 16 of this Law,
must reooZniee the relationehip of principle and accessory in all
the documents of any kind produced by one and the same act of loan,
pledge or indebtedness. If any change takes place in the obliga-
tion or in the parties conoerned'in the transaction, it can no longer
be recognised as one and the same act.
Article 15.
? Revenue stamps shall be affixed on the "renting
or lease document," mentioned under item 22 of the Table of Duty Rate3
of Article 16 of this Law, according to the aggregate amount of
1: guarantee money and of rent paid per term as specified on the
document.
If the rent is to be paid in kind and in propor-
tion to the future production of the tbject leased, the quantity
of products representing the amount of rent for the first term of
lease, shall be estimated at its money value according to current
prices, and then revenle stamps shall be affixed accordingly.
Article 16.
The actual total amount of receipts shall be,
calculated and registered monthly on the receipts or books for the
remuneration of services mentioned in item No.35 of the Table of
Duty Rates .of Article 16 of thie law, and the correct amount of
revenue stalk:we shall be affixed on each of them. It shall not be
allowed to draw up separate receipts so as to evade reporting the
amounts received.
Article 17.
Where their time limit has bean agreed upon before-
hand the different documents subjact to the revenue stamp duty
according to this Law, shall be valid within that time limit. Where
the time limit of the documents is set at the end of the year, their
rs
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t
validity shall expire at the end of the year. Documents mpich
continue to be in use after the above time limits have expired
shall have new revenue stamps affixed on them.
Article 18.
The investigation of the revenue stamp duty laid
down in Article 17 of this Law, besides being-governed by the pro-
visions of this Law and these Rules, shall be enforced in conformity
with the Regulations governing the Investigation of the Revenue
Stamp Duty 1) drawn up by the Ministry of Finance.
Article 19.
If any officials investigating revenue stamp duty
conduct the investigation without carrying a warrant as laid down
in Artiole 18 of this Law, the persons subject to investigation
shell not accept their authority.
Article 20.
When according to the provisions of Article 20 of
this Law, investigators have dincovered that any documents are in
contravention of this Law and seek to remove them for report and
examination, whatever may be the number of the documents which
contravene the Revenue Stamp Duty Law, receipts for them shall
always be issued to the party concerned. If actual requirements
render it impossible to remove the documents, the persons subject
to investigation shall prepare a statement of the contravention
of the Revenue Still) Duty Law and give it to the investigators who
shall transmit it to a judicial organ for examination and judgment.
Any investivor who has on his own account arbi-
trarily imposed any punishment or granted exemption from punishment,
shall be severely punished according to the Law.
Article 21.
Denunciations of documents contravening this law
as provided for in Article 21 of this Law, shall be made to the
looal competent revenue stamp duty office.
If while performing his duties, any public func-
tionary discovers any document in contravention of this Law, he
shall denounce it to the local competent revenue stamp duty office.
But, if in the course of legal proceedings, a local judicial organ
makes such a discovery, it may impose a.direct punishment.
The competent revenue stamp duty office shall,
immediately upon receiving the denunciations mentioned in the above
two paragraphs, despatch officials to conduct an investigation.
Article 22.
If as mentioned in Article 24 of this Law, the
carrying out of the investigation has been obstructed, the police-
men and the headmen of the Pao Chia concerned who have assisted
(the investigation) shall give witness to the case, and the parti-
cipating investigatore shall prepare a report of the facts and ,
send it to the competent office which shall write to the local
judicial organ requesting it to examine and judge the oase according
to the law.
EDITOR'S NOTE: 1) These Regulations were promulgated on the 6th
of August, ?47.
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Article 23.
"Violations of the provisions of this Lan" as
mentioned in Article 25 of this Law, shall refer to violations of
Articles6 to 12 and Article 13, such as entire or partial failure
to affix revenue stamps, failure to stamp the revenue stamps which
have been affixed or failure to stamp them according to the pro-
visions or the use of revenue stamps removed (from another
document).
Article 24.
When a judicial organ has imposed a fine for. any
violation of this law with rL,-rd to any document, after the fine
and the revenue stamp duty prescribed in Article 27 have both been
paid, the party resPonsible for the document may show the receipts
to the judicial Organ and request it to return the document
immediately.
Article 25.
The multiplier for the readjustment provided in
Article 30 of this Law shall be calculated by taking the ratio of
the index number of wholesale commodity prices throughout the
country for February of the thirty-seventh year (of the Chinese
Republic) 1)4 as basic figure, to the index number of wholesale
commodity prices throughout the country for the month preceding
the readjustment. The formula of computation is as follows:
Milltiplier for readjustment =
index no. of wholesale commodity prices throughout the country for
the month preceding the readjustment, divided by
index no. of wholesale eommodity prices throughout the country for
February of the thirty-seventh year (of the Chinese Republic)
In computing the above-mentioned multiplier, it
shall be taken correct to the nearest *hole number, i.e. four tenths
being left out of account and five tenths taken as one.
If the multiplier for readjustment is less than
five, the Ministry of Finance may temporarily delay the readjust-
ment of the duty rates.
Article 26.
If any regulations or explanatory precedents
existing before the enforcemt of this Law, are in contradiction
with the provisions of this Law, those parts of them which are in
contradiction shall- lose their validity as from (the date of)
enforcement of this Law.
Article 27.
These Rules shall come into force on the same
date as the Revenue Stamp Duty Law.
( End )
EDITOR'S NOTE: 1) i.e. year 1948.
MONTHLY BULLETIN NO.XIX - June 1948 - Annex NO.IVII - Page 5
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50002-1
UNIVERSITE L'AURORE
-Shanghai-
BUREAU DE DOCUMENTaTION
(Ecenomie Chinoise)
.;
280 Chungking Mtn Lu (Dubail)
ATelt.9570..
; .
If .
Commodity Tax Regulations
Revised and promulgated by the
National Government
on the 2nd of April 1948;
Published in the Weekly Review
of Laws (Fa Ling Chou Klan),
May 5th 1948.
Annex No. IVIII
Rubber of pages: 7
Remarks: Translated by
our Legal Department.
COMMODITY TAX REGULATIONS 1)
Article 1.
Except where it is otherwise provided, commodity
tax shall be levied according to these.Regulations on all commodi-
ties specified therein, whether they are produced or manufactured
in this country or are imported from abroad.
Article 2.
collected by the
(Shui lh Shu) of
Article 3.
commodity tax:
The commodity tax is a State tax and shall be
oommoditg tax offices under the Bureau of Taxation
the Ministry of Finance.
The following commodities shall be subjeot to the
1) Rolled Tobacco: comprising all kinds Of Cigarettes
made with rolls of tobacco enclosed in cigarette
paper, Cigars made with tobacco leaves, as well An
Foreign-style Tobacco.
2) Flue-cured Tobacco Leaf.
3) Foreign Wines and Beer: comprising all kinds of
foreign-style wines manufactured in this country,
EDITOR'S NOTE: 1) The Commodi..4 Tax Regulations were first pro-
mulgated by the National Government on Aug. 16th
1946, and were successively revised on Nov. 26th
1946, on Mar. 21st 1947 and most recently on
April 2nd 1948.
For further details our readers are referred to
Monthly Bulletin No.VII - April 1947 - Document
44 & No.VIII - May 1947 - Document 46: ?A
prehensive Study of Taxation on Commodities
in Chinas, by Yang Ta-soong. -
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with the exi:epti.on of alcohol.
4) Ma7.ces: r::77errinh b)th to those made with phoephorus
suipnide and to sa:rety matches.
'5) Sugar; including brown ani White sugar, orange
sugar, crystal sugar, cube sugar, lump sugar and
refined sugar.
6) Cetton Yarn: comprising machine-made unbleached
cotton yarn, singed cotton yarn, cotton yarn waste,
yarn made with artificial cotton and all other kinds
of cotton yarn.
7) WOOlian Yarn and Woollen Thread: comprising woollen
yarn ard woollen thread, and yarns and threads made
fr,a woel mixed with other fibres.
8) Furs.
9) (ement.
10) Beverages: comrising aerated water, fruit juice,
fruit syrup,
11) tin Foil. and Paper used f,)1. Superstitious Purposes:
referring to all kinds of tin foil and paper used for
superstitious purposes.
12) Cosmetics: including hair pomade, brilliantine, face
powder, rouge, shaving soap, lipstick, perfume, nail,
polish and eyebrow pencil.
Article 4.
The rates of the commodity tax shall be as foll,p5:
1) Rolled Tobaccos 100%
2 Flue-cured Tobacco Leaf: 30%
3 Foreign Wines and Beer: 100%
4 Matches:
20%
5) sugar: 25%
6) Cottea Yarn: 7%
7) Woollen Yarn and Woollen
Thread:
15,'
Furs: i;
15%
:i Cement 15%
10) Beverages: 20%
11) Tin Foil and Paper I.:bed for
Superetitious Purposes: 6o%
12) cosmetics: 45%
Article 5.
ad valorem
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The taxable value of a commodity subject to the
commodity tax shall be computed on the basis of its avarage whole-
sale price over two months on the markets near the producing
region.
The above-mertioned average wholesale price covers:
(a) The taxable value of the commodity concerned;
(b) The original commodity tax to be paid, i.e.
the tax rate to be applied to the taxable
value of that conm.odity;
Th expenses for transporting the -commodity
fro:11 the producing region to a nearby market,
being fixed at ter per cent of the taxable
7a1u.
(e)
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Therassessed taxable value 1) =
average wholesale price on markets near the producing region X 100,
divided by (100 + tax rate on the commodity concerned + expenses
for transporting from the producing region to a nearby market i.e.
10)
All goods who :,a price hap been agreed on by a
government office may be dealt with according to the provisions of
the preceding paragraph, taking the agreed price as the basis for
computing the taxable value.
In order to facilitate the examination of goods
subject to commodity tax and the levying of the tax, the Ministry
of Finance may, after consideration of the circumstances, adopt a
graded tax. The method of computing this graded tax shall be laid
down by the Ministry of Finance.
Article 6.
The exr.mination of the selling price of goods of
all kinds subject to the commodity tax, the compilation of the index
number far commodities and the estimation and revision of taxable
values shall be carried out by an Appraisal Committee set up by the
Bureau of Taxation. Regulations governing its organisation and
rules for appraisal shall be laid down by the Ministry of Finance.
The members of the above-mentioned Appraisal
Committee shall be appointed by the Ministry of Finance from among
the heads of the departments concerned.
Article 7.
Any of the commodities specified in Article 3,
which are imported from abroad, besides paying customs duty; shall
be subject to the commodity tax according to the value estimated
by the Customs House.
EDITOR'S NOT 1) The formula is arrived at by substituting in the
original equations
W.P.
= T.V.
+ A? T.V.
4. 10 T.V.
100
100
100 x
01.2.
= T.V.
(100 + 25
+ 10)
\
T.V.
=
100
+ 25 + 10)
(W.P. = Whole Price; T.V. = Taxable Value)
To illustrate: let the average wholesale price
per 10u Shih Chin (or 110.23 lbs) of sugar be
CR410,000,000, and the tax rate 255 ad valorem; and let
the expenses of transport be 10$ of the taxable value.
Then:
The taxable value = CH$10,000,000 X 100 i (100 + 25 + 10)
= 0147.407.40.40.
and
The tax payable = C147,407,407.40 X 25;;;
= CR67,3.851.851'65.
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Ar4icle 3.
Wh-tn any com-eAity for which the commodity tax
has already been paid, c,.e.uorted ocA sold within this coua,try,
no loca2lgoTernment 3.3 alt,bwr:d cIlavy any fl;x'-har tax thereon.
A' a oDmmo:.ity rcperted after it has paid the
commodity tax, t:s tax vha:1 be ..:efunded. Important goods for
export which ar.i to be expol-ted directly frcm the producing factory
may be exempted from cummodil:y tax according to regulations laid
iawn by the Miristry of Pi.nance.
Article 9.
eompr:tent commodity tax offices shall
statior officials i? n fecories and dot c to collect the tax on
taxable rlimiloditios 1:13A,..1Cqa thiu .!cuntry. In special
circumstances, tha off,oi?e,28 may be directly appointed
by the Bureau of Taxation. If it is inonvenient to station of-
ficials in a factory or depot, th.i c,.-mpotnt ccmm:.dity tax offie
may investigate and i.rd out the amount w production and collect
the tax at stated'intervals, or the merchant shall report produc-
tion to the local ,ompetent cemmodity tax offine which shall
collect the 1?ax according to the law, Tic Customs House, #hen
levying .lintoms duty on commodildus impored from abroad, shall
also act as tax -:on.o.ctor.
Article 10.
After the commodity tax has been paid for
modities, documents certifying tax payment shall be issued
. provided below; the commodities may then be sold.
1) Rolled Tobacco, Matches, Foreign Wine,
Beer, Beverages and cosmetics:
The taxation office or the officials stationed
in the factory-shall issue and affix a certificate of inspection:
1/ on each smallest-sized package of rolled tobacco; ii/ on each
package of ten small boxes of matches; iii/ on tlie sealed opening
of each smallest-sized container of foreign wine, beer or beverages;
iv/ on the sealed opening of each smallest-sized container of
*cosmetics or on each regulation unit package. They shall see that
revenue staMps are affixed on ,iach case or package. If the commo-
dities are declared to be tranoporteeto other places, a trans-
portation permit shall be filled in and issued. But if a factory
of foreign wines, beer or beverages has complete equipment and
has installed calculators on its machines according to which the
total output can be known, t may apply to the Ministry of Finance
for approval to stamp on the cntainer: "Commodity Tax Already
Paid",.encl for a taxation receipt to be issued.
2) Cotton Yarn, Flue-cured Tobacco,
Sugar, Woollen Yarn, Woollen Thread,
?uis, Tin Foil and Paper used
for Superstitious rurposes:
com-
as
? toxation of "ice or the officials stationed in
the factory ar in the depot; fill in and issue taxation
re.)eipts and so,? :;het starve,2, aeymit is affixed en each packa.
7)) Wheat 1.P:_our and Cement:
:he taxa-...n vfrice or officials stationed
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in the factory shall fill in and issue taxation receipts.
4) Commodities Imported from Abroad:
The merchant, after slcuring a Certificate of
Payment-of the Commodity Tax upon payment of the tax to the Customs
Houses shall request the competent cdommodity tax office to issue
in exchange documents certifying tax payment as provided above.
5) Tax Free Commodities for Ekport.
The competent cOmmodity tax office shall, after
oheoking up, issue a certificate of tax exemption.
6) Commodities already Taxed;
In the case of break of bulk, the competent
commodity tax office shall, after checking up, issue a permit for
break of bulk. Where repacking or reproceseinc is necessary, the
tax office shall see that a certificate of repacking or reprocessing
is affixed on the repacked or reprocessed commodities.
Article 11.
If any company, factory, shop, firm, storehouse
or trader engaged in the production, manufacture, transportation,
storing or selling of goods subject to commodity tax, or buying
and selling them on behalf of customers; or any owner of such goods,
oommits one of the following offences, the goods shall be confis-
cated and a FA Huan fine 1) imposed, of not More than ten times the
amount of tax-evaded. Contraventions of the criminal law shall be
punished according to that law.
' .
1) The surreptitious manufacture of articles subject to the
commodity tax;
? }
2 Smuggling or secret sale of untaxed commodities;
3 The buying of, untaxed commodities for secret processing;
4 The transport and sale of articles subject to the commodity
tax, without a permit or certificate, or with one which
. does not correspond to the commodities and whose use has
been defined by the commodity tax office as an evasion of
' tax;
5) Any evasion of tax by declaring goods as of low price when
they are of high price;
6) Any evasion of tax by nixing goods of high price with
goods of low price or of other kinds;
7) Any evasion of tax by exceeding the standard quantity or
weight of the package or container;
8) Any evasion of tax by deliberately (falsifying) the account
book so thmt it does not correspond to the amount of goods
stored in the factory;
9) Any evasion of tax by deliberate under-declaration;
10) Any evasiOn of tax by clandestinely selling within this
eountry dbmmodities exempted from the tax as exports to
. foreign countries;
EDITOR'S NOTE: 1) The term Fa Huan is used for a fine of a civil
character under civil law, or of a fiscal charac-
ter, imposed for breaches of taxation laws; in
both cases it is impoeed for offences, which do
not come under the penalties of the criminal law.
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11) Clandestinely altering or uning a second time a taxation
receipt, transportation permit, permit for break of bulk,
revenue stamp, certir_uate of inspection, stamped permit,
certificate of repacking or reprocessing, certificate of
tax exemption, or certificate of payment of the commodity
tax issued by the Customs House;
12) Failure actually to affix on the package or container the
revenue stamps, certificate of inspection, stamped permit
or certificate of repacking or reprocessing;
13) Any evasion of tax or illegitimate claim for refund of tax
made by using forged taxation receipt, transportation
permit, permit for break of bulk, revenue stamps, certifi-
cate of inspection, stamped permit, certificate of repac%-
ing or reprocessing, certificate of tax exemption, certifi-
cate of payment of the commodity tax at the Customs House,
or seal of an office.
14) Failure to declare for taxation, as prescribed, importe::
commodities subject to the commodity tax, upon their
arrival from abroad.
If any commodity evading the tax in the above ways,
has already been sold and hence cannot be confiscated, besides
punishment according to the law and payment of the price of the
commodity, the payment of the tax shall still be enforced.
In the case of surreptitious manufacture of com-
modities subject to the commodity tax, besides the confiscation of
these commodities according to the provisions of this Article, the
machines, instruments and raw materials used in their surreptitious
manufacture, may also be confiscated.
Article 12.
If any company, factory, shop, firm, storehouse or
trader engaged in the production, manufacture, transportation,
storing or selling of goods subject to sommodity tax, or buying
and selling them on behalf of customers; or any owner of such goods,
commits one of the following offences, a Fa Huan fine not exceeding
five million dollars shall be imposed.
1) Failure to register as prescribed;
21 Failure to make declaration according to the preseribed.
procedure or false declaration;
3) Break of bulk or change of destination of already taxed
commodities without the necessary permit;
4) Sale of already taxed commodities during transit without
applying to the local commodity tax office for permissicn;
5) Transporting and selling already taxed commodities without
applying for inspection as prescribed;
6) Transporting and selling imported oommoditiss for which
a certificate of payment of the commodity tax has been
secured from the Customs House, but without applying for
the exchange of this (provisional) certificate against the
prescribed document certifying the payment of the commodity
tax.
7) Tearing off used stamps, certificates or permits with the
intention of using them again, if this is proved by
evidence;
8) Returning secretly to the factory old packages or con-
tainers without washing off the old stamps, permit or
certificate of inspection affixed thereon;
??? alb ??
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9) Refusing investigation; if in contravention of the crimtn1
law, it shall be punished according to that law.
Article 13.
No factory for rolled tobacco or paper nor merchant
dealing in paper,,in thia country, shall manufacture, buy, sell, or
transport paper used for rolling tobacco, without the permission of
the Bureau of Taxation or the competent commodity tax ,office.
If the above provisions are contravened, the com-
modity shall be confiscated and a Fa Huan fine not exceeding ten
times the price of the paper shall be imposed. The business may
further be closed down.
Any failure to make declaration as prescribed cr
any false declaration, when manufacturing, buying, selling or trews-
porting paper used for rolling tobacco, shall be punished with a
Fa Huan fine not exceeding five million dollars.
Article 14.
The Fa Huan fines and confiscation provided for in
the preceding three Articles as well as the closing down of businsis
mentioned in the preceding Article shall be enforced by court
An appeal may be filed within five dayi after ser-
vice of the above-mentioned ruling. But no further appeal shall be
made.
Article 1.5.
If any merchant is in arrears for the payment of
his tax, the commodity tax office may request the court to pres-
cribe a time limit for making the payment, failing which the court
shall enforce payment.
If a merchant is declared bankrupt aocording to the
law, the payment of the above-mentioned arrears of taxation shall
be 4ven priority.
Artiole 16.
The Ministry of Finance shall lay down rules gov-
erning the collection and inspection for each kind of commodity tax
and its 'registration, and also the manufacturing, purchasing,
selling and transportation of paper used for rolling tobacco; and
shall submit them to the Executive Yuan for confirmation.
Article 17.
These Regulations shall come into force on the
date of promulgation.
( End )
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UNIVERS
I-3 L ' AU ROBE
-Shanghai-
BUREAU DE DOCUMENTATION
(Economic Cliinpise)
----- 7--
280 Chungking Nan Lu (Dubail)
Tel:85761
Regulations Governing Application for
Registering Profit-seeking Enterprises
and Business Offices of Members of
Liberal Professions.
Revised and promulgated by the Ministry
of Finance on the 18th of May 1:448.
Published in Central Bank Weekly
(Chin Yung Chou Pao),
June 2nd 1948.
Article 1.
Annex No.: 11X
Annex concerned s Nos. L
& LIII
Number of pagess 4
Remarks: Translated tv
our Legal Department.
REGULATIONS GOVERNING APPLICATION FOR
REGISTERING PROFITSPWING ENTERPRISES .
AND BUSINESS OFFICES OF MY44ERS OF
LIBERAL PROSTSSIONS 1/
These Regulations are laid down in conformity with
the provisions of Article 161 of the Income Tax Law 2).
Article 2.
AppliCations for registering profit-seeking
enterprises and business offices of members of liberal professions,
shall be made in accordance with these Regulations.;
Article 3.
All newly founded profit-seeking enterprises or
those which are reopened or continue to exist after reorganisations
merger or transfer of ownership, shall, within fifteen days after
inauguration of business, apply to the local competent collecting
EDITOR'S NOTES: 1) This new revision brings about only slight
changes in the former Measures Governing Appli4
cation for Registering Profit-seeking Enterprise::
and Business Offices of Persons in Liberal Prr,-
fessions of October 28th 1941 which contain ne
same number of Articles (cf. Monthly Bulletin
No.XIV - Jan. 1948 - Annex XII). For the prin-
cipal changes or innovations, compare Articles
3,4,5,8 and 15 of the two texts.
2) The Income Tax Law was recently revised and
promulgated on the 1st of April 1048 (cf. Monthly
Bulletin NosPIII &XVIII - April & May 1948 -
Annexes I & LIII).
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office for registration and the issue of a Certificate of Income
Tax Registration in Cetegory e: ir fir:line in the eeplication for
Registration, they must give the iellowing rarticulers:
1) Trade name and address of the firm, and if principal,
branch and sub-Eranch stores are established, the
address of each.
2) Fell name, ages, neeive places and addresses of the
responsible persons.
3) The amount of the actual capital; full names and ad-
dresses of the shareholders and their respective
subscriptions. But in tte case of stock companies
limited and ;her cornani,,:-4, the "full names"
.and other items ccecerring the ehareholders may be
replaced by the fuel nemee and addresses of the dir-
ectore and supervisers and their eubecriptions, and
in the case of joint cenpanies and jcint stcck com-
panies, they eay be replaced by the full names and
addresses of shareholders df unlimited liabelity
and their subscriptions.
4) The nature of the organisation; If it has already
been eggistered as a company 1) or a commercial
firm 4), the date when theregistration was approved
and the character aEd number of the cereificate.
If the firm has joined a guild, that guild and the
date, character and number of the membership certificate.
5) Type of business, accounting year and date of in-
auguration of business.
Article 4.
A profit-seeking enterprise, when applying for
registration, end the issue of a certifioate, shall furnish a
guarantee for the payment of taxes. Bet profit-seeking enter-
prisee established and registered in conformity with the Company
Law 1) or Commercial Registration Law 2), public enterprises
operated by any grade of government and enterprises jointly
operated by the Government and private interests, shall be exempted
from furnishing the guarantee.
The guarantee for payine taxes as mentioned above
shall be given by a well-to-do shop with an adequate amount of
capital. Once the guarantor comeercial firm has filled in a tee
payment guarantee, it shall t eele responsible for all the tax
paying liabilities of the guaranteed commercial firm. If for any
reason the guarantee is to be cancelled, this shall be reported to t
the local competent collecting office, and the responsibility of
the guarantee shall not cease. until the guaranteed commercial firm
has obtained another guarantee for its tax payments.
'EDITOR'S NOTES: 1) For provisions governing the registration of
companies, see the Company Law promulgated by
tho National Goverement on the 12th of April 1946.
2) For commercial registration, see the Commercial
Registration Law promulgated by the National
Government en the 28th of June 1937. For a new
Draft of the Commereial Registration Law drawn
up by ths Minietry.ef elnanee, reference may be
eade to Monthly Bulletin Ne.XIII (Dec.1947)
annex XXXVI.
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Article 5.
Any member of a liberal profession with a business
office shall, within fifteen days cc'ter the inauguration of his
business, apply to the local competent collecting office for reT.is-
tration and the issue of a Certificate of Income Tax Registration in
Category B; in filling in the Application for Registration, he shall
set forth the following particulars:
1) Name and address of the business office; and if branch
and sub-branch offices are established, the address of
each.
2) Full names, ages, native places and addresses of the
responsible persons.
3) If the responsible persons or those who are doing the
business have a certificate, the date, character and
number of the certificate, and if .they have joined a
guild, that guild and the date, character and number
of the membership certificate.
4) Type of business and date of inauguration of business.
Article 6.
, If any profit-seeking enterprise has establiehed
branch stores or business offices, or if the busiaess office of any
member of a liberal Profession has established branch offices, each
of these branch stores or business offices, or branch offices shall,
in accordance with the procedure provided in Article 3 or 5, apply
for registration and the issue of a Certificate of Income Tax
Registration in Category A or B.
Article 7.
- A profit-seeking enterprise which is to cease
operating on account of merger, dissolution, transfer of ownership
or suspension of business, or a member of a liberal profession
whose business office is to be closed, shall, within fifteen days
preceding the cessation of business, fill in an Application for
Cancelling Registration, and submit it together with the original
Certificate of Income Tax Registration, to the local competent
collecting office, thus applying for the registratLon to be cancelled.
Article 8.
A profit-seeking enterprise or a member of a liberal
profession, whose business office is to change its name or respon-
sible persons or to be moved to another location, or a profit-
seeking enterprise Which is to change the type of its business,
shall, within the fifteen days preceding the change or removal,
fill in an Application for Altering Regintration, submit it together
with the original Certificate of Income Tax Registration, to the
local competent collecting office and apply for the registration
to be alteredd-and a new Certificate issued.
Article 9.
A profit-seeking enterprise whose capital amount is
increased or decreased, shall, within fifteen days after such ine
crease or decrease, fill in an Application for Altering Registration,
submit it together with the original Certificate of Income Tax
Registration, to the local competent collecting office and apply for
the registration to be altered and the issue of anew Certificate.
Article 10.
If a Certificate of Income Tax Registration has
been lost, an Application for Renewing the Registration Certificate
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shall be filled in within five days and submitted together with t'le
text of an announcement in the newspaper or documentary evidence
from the local chamber of commerce or guild, to the competent col-
lecting office so that a new Certificate may be issued.
Article 11.
- If a Certificate of Income Tax Registration has
been damaged', an Application to Change the Registration Certificc.te
shall.be filled in within five days and together with the damaged
Registration Certificate, submitted to the competent collecting
office so that the Certificate may be changed for a new one.
Article 12.
The competent collecting office, shall, within
fifteen days after receiving any of the preceding Applications from
a profit-seeking enterprise or a business office of a member of a
liberal profession, send officials to conduct an investigktion, and
according to the case, approve, issue, exchange or cancel the Cer-
tificate of Income Tax Registration.
article 13.
The competent collecting office shall enter dif-
ferent kinds of applications of profit-seeking enterprises and of
business offices of members of liberal professions, into classified
files and also prepare Registers classified according to Location
of Premiens and to Type of Business, furthermore registrations or
corrections thereof shall be made at any time.
Article 14.
If a profit-seeking enterprise or the business . .
office of a member of a liberal profession has lost a, Registration
Certificate, but fella to apply for a new one to be issued, or
fails to return it for canoellation at the proper time, or sells,
transfers or hires it out for use by others, the applicant who
originally secured the certificate shall be held responsible for
all the. obligations to pay taxes resulting from the original
Certificate.
Article 15.
If, in contravention of the imovisions of these
Regulations, the responsible person of any profit-seeking enter-
prise or any member of a liberal profession fails to apply for the
-
registration to be made, cancelled or altered within the prescribed
time limit, the competent collecting office shall impose punishment
as provided in Article 146 of the Income Tax Law.
Article 16.
These Regulations shall come into force on the
day of promulgation.
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