Canton has, to some extent, lost its former importance for us, and its merchants no longer have the monopoly of the whole external trade of China; so we return to Hongkong without further delay, and rejoining our ship steam out through the narrow eastern passage, the _Lai-i-mun_, and turn northwards on our voyage.
Our next port of call is Shanghai, a most important centre of (1) British trade and influence and in close connexion with British stations in the East, though not one of them itself. Hongkong is the great exchange station for shipping and trade in the Far East; Shanghai is the market and business centre for the great basin of the Yangtse river and for much of North China as well. Its importance may be measured by the fact that over half the total trade of China passes through the hands of its merchants. There are two Shanghais, and the contrast between them is great; on the one hand we have the old native walled 40 city, dirty and decaying and purely Chinese, and on the other the new Foreign Settlement, where all the business is done. 41 This part has grown steadily in size and prosperity. The French still have entire control of their own section, but in the International Settlement, which was at one time purely British, Germans and Americans have now a considerable share. We have here a very curious system: a foreign municipality established on Chinese soil and governing itself, subject only to the control of the foreign Consuls and the Ministers at Peking. It is responsible for a few thousand Europeans and over half a million Chinese. At Hongkong we are supreme in everything; but at Shanghai, though the citizens of foreign nations are subject to their own laws, the city is still legally part of China, so that the natives are under the jurisdiction of Chinese officials. This has been the cause of great trouble in the past, as Chinese and Western ideas of law are widely different. It is a very strange position. Here is a small body of foreign merchants, practically unprotected, in the midst of a vast native population, yet responsible for the well-being of one of the greatest commercial cities in the world.
Trade is the sole foundation of this new Shanghai, and trade 42 depends on the river Hwangpu; for though Shanghai is the outlet for the Yangtse basin, it stands at some distance from the main river and the sea, at the head of the tideway of a small tributary and in close contact with a great network of canals and rivers in the fertile country to the west. The bank of the river is lined with wharves, warehouses and factories, and the Settlement is spreading steadily down towards Wusung. The flat country round has been built up of silt brought down by the main river; centuries ago Shanghai may have been on the coast. The river is still at work: great banks are formed under water, and in a few generations become dry land thickly populated. In the whole breadth of the Yangtse mouth there are only two channels navigable by large vessels. Everywhere the land is gaining on the sea. Into the broad silt-laden estuary the little Hwangpu empties itself below Wusung; it brings down no silt, but the incoming tide sweeps in the muddy water of the main river. The silt is dropped and the stream is too weak to scour it away. At the mouth of the Hwangpu is a great bar, which is still growing; and so much has the channel changed and shallowed that it is no longer safe for the largest vessels to approach Shanghai. We may see the same process going on in England, in the Humber and the rivers flowing into the Wash. The Chinese are at last beginning to move; a new channel has been cut for traffic on the Hwangpu; the bed of the river has been dredged and its course straightened, and an embankment built to keep out the silt from the main river. But the size of the vessels engaged in trade increases every year and the future of Shanghai is in the balance; it remains to be seen whether modern engineering will win the day against the vast forces wielded by the Yangtse. Any decline in the activity of Shanghai would be likely to result in more business for Hongkong.