The industrial position in the Pacific is thus governed largely by the fact that in all the White settlements on its borders there are more or less complete safeguards against competition by Asiatic labour on the White man's territory: and that the tendency is to make these safeguards more stringent rather than to relax them. Nothing short of a war in the Pacific, giving an Asiatic Power control of its waters, would allow Asiatics to become local competitors in the labour markets of those White settlements.
But debarred from colonisation the Asiatic has still two other chances of competition:
(1) In the home markets of his White rivals in the Pacific;
(2) In such neutral markets as are open to his goods on equal terms with theirs.
The first chance can be swept away almost completely by hostile tariffs, which it is in the power of any of the White nations to impose. There are no Free Trade ideas in the Pacific; the United States, Canada, New Zealand, and Australia, all alike protect their home markets against any destructive Asiatic competition. If Japanese boots or Chinese steel work began to invade the markets of Australia or America to any serious extent, the case would be met at once by a hostile tariff revision.
The second chance, open to the Asiatic industrial, that of competing with White labour in neutral markets, of cutting into the export trade of his rivals, is greater. But even it is being constantly limited by the tendency to-day which makes for the linking up of various nations into groups for mutual benefit in matters of trade; and which also makes for the gradual absorption of independent markets into the sphere of influence of one or other group. Some students of tariff subjects foresee the day when a nation will rely for export markets on dominions actually under its sway and on a strictly limited entrance to foreign markets paid for by reciprocal concessions. They foresee the whole world divided up into a limited number of "spheres of influence" and no areas left for free competition of traders of rival nations. Under such circumstances a Power would have free and full entry only into those territories actually under its sway. Into other markets its entry would be restricted by local national considerations and also by the interests of the Imperial system having dominion there.