Japanese law specifies Japanese control of the policy of mining companies, though some foreign financial interests are allowed. Japan controls a part of the coal produced in China, and by presenting insistent demands is increasing her control in that country. If given a free hand, Japan is in a position to exercise industrial and military control in Asia almost as thoroughly as the United States can in America. English and Belgian interests have some Chinese coal, and thus are about the only real competition at present with Japanese control. =China.=--Outside the United States, China has the largest coal reserves of any country in the world. The coal varies in quality and grade; some of it is excellent, but the production has reached only about 18,000,000 tons a year. Some districts export and others import coal. The country could easily be independent if there were internal means of distribution. There might even be large exports if production began in advance of other industrial development. Coking coal is available only in certain areas, mostly in the south. The largest and best-equipped producer is the Kailan Mining Administration, operating British and Chinese properties. The ownership of the company is mostly in Belgian hands, but the incorporation is under Hong Kong law, so that the company is under British control. The chief producers in China are: TABLE 6.--CHIEF PRODUCERS OF COAL IN CHINA ----------------------------+-----------+---------------------------- Company |Tons a year|Control ----------------------------+-----------+---------------------------- Kailan Mining Administration| 3,000,000 |British and Chinese Funshun Collieries | 2,000,000 |Owned by the South Manchuria | |Railway Co. (Japanese) Pingshieng Collieries | 1,000,000 |Chinese Pekin Syndicate | 500,000 |British Pingshihu | 300,000 |Japanese Lincheng | 800,000 |Belgian ----------------------------+-----------+---------------------------- The Mining Company of Shantung, producing 400,000 tons a year, formerly owned by the Germans, is now run by the Japanese military organization. Thus only one of the large producers is under Chinese control, though many smaller mines are worked by Chinese. The Chinese law designed to prevent foreign control of this sort is not effective. It requires that the share of a mining industry held by foreigners shall not be over one-half; but if a foreign company owns half the shares and finances the Chinese half by a loan, the foreign control may be complete. There is a further control of mining, through the ownership of railways. All the larger producers must ship coal by rail, and foreign nations are allowed to finance railways. The difficulty of a government exercising adequate political and commercial control when it grants concessions in this way is evident.