Finance. – Various factors have adversely affected Chinese finances: the contraction in international trade, the need for greater spending on defense and internal order, the reorganization of regional finances and relief to populations affected by floods, the loss of income from the tax on salt and customs in Manchuria and also the serious damage (up to almost one third of the total revenue) deriving to the customs administration from smuggling largely exercised in the demilitarized zone and in the territory controlled by the Autonomous Council of Eastern Hu-peh, of Japanese emanation. Having succeeded in repeated complaints made to Tōkyō, even by the foreign states concerned, the national government was nevertheless able, with extremely vigorous measures, to reduce the latter to normal proportions.
To reduce the deficit, on the other hand, he proceeded to consolidate the internal debt (1936), to settle the railway debts and to revise the taxes and methods of perception. Then came the war with Japan, the financial consequences of which it is impossible for now to examine.
Following the artificial rise in the price of silver caused by North American politics, largely in vain the efforts made in 1934 to curb the exodus of white metal (control of exchange rates and export duties), China decided, in November 1935, to abandon its secular monetary base, detaching from silver the Chinese dollar or yüan (equivalent to 0.715 of the ancient tael, that is to gr. 23.493448 of fine silver) adopted as a monetary unit on April 6, 1933. It was therefore the devaluation of the yüan has been sanctioned, fixing the exchange rate with the pound sterling at 14 ½ pence (previously at 17 ¼); release power was attributed to the notes of the three state banks (Central Bank of China, Bank of China and Bank of Communications), declared inconvertible but covered by a 60% reserve (which following the Sino-American agreement on silver of May 5, 1936 must be at least 25% in silver and the rest in gold and currencies); the silver clause in contracts was abolished; the circulation of silver was prohibited and its conversion into notes was imposed. According to paradisdachat, the reform also provided that the Central Bank had to gradually replace its notes with those of the other banks in order to be able to assume at the end of 1937 the monopoly of the issue and also the functions of supervision and custody of the reserves. Currency Reserve Board.
But the events that subsequently took place prevented the implementation of this program and indeed even the tickets of the Farmers’ Bank were legal tender.
In August 1937 various banking and exchange restrictions were then adopted to prevent the flight of the currency. As of 30 September 1937 the notes of the four banks amounted to 1545 million yüan (a considerable quantity of silver coins is also in circulation, since the idea of the absolute demonetization of the metal has been abandoned, according to the official statement about the the aforementioned Sino-American Convention); at the same date the central bank’s metal reserves were 273 million, mostly in silver.
In addition to the Central Bank established in 1928, the main credit institutions are: The Bank of China (1911 reorganization of the 1902 China Bank), the Communications Bank (1907, which in 1928 had the privilege as an industrial bank) and the Farmers’ Bank (1933):
Education and public education. – As regards education, according to the organization given by the national government, the ordinary course of studies includes: a) Elementary school, with two courses: lower, four years, and upper, two years; it is compulsory in the lower course, which can be accessed at the age of six. b) The middle, lower and upper school, lasting three years each, with five sections: ordinary, which prepares for university and gives general cultural orientation; then normal, agricultural, industrial, commercial. c) The University. There are 14 national universities and 15 government-recognized private universities in China. In addition to the aforementioned institutions, numerous other professional and special (art, music, etc.) governmental and private schools are in operation. Important institutes founded and directed by Catholic missionaries (the Jesuits own the Aurora University in Shanghai) and Protestants. The Sinica Academy (Chung Yang Yen Chiu Yüan), the highest indigenous institution for scientific research, founded in 1928, should also be mentioned.
Missions. – Apart from the vicariates and prefectures and missions of Manchuria (see Manchuria, App.), The following changes are to be recorded:
Missions elevated to prefectures: Ta-li (1931), Yi-hsien (1935), Hai-nan (1936), Shih-tsien (2 December 1937); missions elevated to prefectures and then to vicariates: Hwang-chow (prefecture, 1932), with the name of Ki-chow (1936); Chang-tien (prefecture, 1932) with the name of Chow-tsun (1937).
Prefectures elevated to apostolic vicariates: Ta-t’ung (1931), Chao-hsien (1932), Show-chow (1932), Sinyang-chow (1933), Yung-nien (1933) Shen-chow (May 28, 1934; changed to Yüan-ling on 10 December 1934), Ka ying (1935), Lo-yang (1935), Sü-chow (prefecture, 1931; vicariate 1935), Kwei-te (1937).
The apostolic vicariates of: Heng-Chow (1930) Shanghai (1933; formerly part of Nanjing), Tsao-chow (1934), I-chow (1937) are newly created.
The apostolic prefectures of: Chao-tung (1935), Chih-feng (1933), Chu-khi (1932), Chu ma tien (1933), Fong-siang (Feng-siang, 1932), Idushien (1931) were created), Hung-tung (1932), Kiang-chow (1936), Kieng-chang (1932), Li-chow (1931), Ling-tsing (1931), San-yüan (1931), Sha-si (1936), Shun-teh (1933), Siang-t’an (1937), Siang-yang (1936), Si-ning (1937), Sin-siang (1936), Suihsien (1937), Ta-ming (1935), Tung-chow (1935; mission, 1931), Tun-ki (1937), T’ai-yüan (1933), Yo-chow (1931), Yu-tze (1931); the missions of Kien-ning (1931), Urga (1922), Wei-hai-wei (1931) have also been established.
Yung-chow, Chu-chow, Shin-tsien, indicated in the table (p. 302) as vicariates, are instead prefectures.