FOREIGN  TRADE  299
States  took  42  per  cent.,  Great  Britain  30  per  cent.,  with
Japan,  Italy,  and  Germany  next.
Straw  braid  is  one  of  the  few  home  industries  introduced
expressly  for  the  foreign  trade.  The  seat  of  the  industry  is
in  the  plain  bordering  the  Yellow  River  in  western  Shantung
and  southern  Chihli,  producing  a  wheat  with  long  straw.
The  export  was  1,361  piculs  in  1867  ;  25,93°  piculs  in  1877  ;
82,413  piculs  in  1886  ;  100,184  piculs  in  1896  ;  and  110,222
piculs  in  1905.  The  principal  demand  is  for  Great  Britain,
which  in  1905  took  44  per  cent.,  with  France,  the  United
States,  and  Germany  next.
Wool  comes  mainly  from  Kansu  and  Mongolia  through
Tientsin,  and  to  some  extent  from  Tibet  through  Chungking,
and,  notwithstanding  the  long  caravan  journeys,  finds  an
increasing  market.  The  export  in  1867  was  1,097  piculs  ;
in  1887  this  had  increased  to  56,261  piculs,  and  in  1897  to
232,343  piculs.  In  1905  the  export  was  281,294  piculs,
viz.  35,331  piculs  of  camels'  wool  (entirely  for  England)
and  245,963  piculs  of  sheep’s  wool  (mainly  to  the  United
States).

Balance  of  Trade
An  essential  part  of  any  study  of  the  foreign  trade  of
China  is  the  consideration  of  the  means  by  which  the  balance
of  indebtedness  between  China  and  the  outer  world  is  struck.
Up  to  1895  the  Empire  had  practically  no  foreign  debt.  As
the  result  of  the  war  with  Japan  which  ended  in  that  year  a
foreign  debt  of  over  £50,000,000  was  incurred  ;  and  the
indemnities  to  be  paid  to  foreign  powers  in  settlement  of
the  military  operations  necessitated  by  the  Boxer  movement ­
  of  1900  added  to  the  foreign  obligations  a  further
sum  of  £67,500,000  ;  the  annual  charge  for  obligations
incurred  since  1895  is,  according  to  the  exchange,  between
Tls.42,000,000  and  Tls.45,000,000.  The  natural  commercial
effect  on  the  trade  of  the  country  would  be  to  increase  the
quantity  of  commodities  required  to  be  exported  to  maintain
commercial  equilibrium  ;  but,  in  fact,  the  tendency  has  been
in  the  direction  of  an  increase  of  imports.  Considering  mer-