Dubai 2026/Shanghai 1927 – Remembering Arthur Ransome’s Shanghai Mindset

Posted: March 8th, 2026 | No Comments »

Lib-Dem leader Ed Davey’s comments in the House of Commons yesterday that British tax exiles in Dubai should now be made to pay tax in the UK made me think of Arthur Ransome. In particular his controversial trip to Shanghai a century ago. While there he wrote back about what he saw as the “Shanghai Mindset”, back when the term “ex-pat” was rarely used and had different connotations than today (of forced exile rather than fiscal convenience). Davey said,

‘As we protect them, it’s only right for tax exiles to start paying taxes to fund our Armed Forces just like the rest of us do.’

English author and journalist Arthur Ransome turned up in Shanghai in 1927 reporting for the Manchester Guardian. The British-dominated International Settlement had virtually no income tax (despite land/property taxes, duties and a few indirect taxes). British subjects were not required to pay taxes back in the UK. Ransome wrote:

‘The Shanghailanders hold that loyalty begins at home and that their primary allegiance is to Shanghai … Shanghailanders of English extraction belong, if they belong to England at all, to an England that no longer exists.’

Perhaps the Sinologist and former Chinese Maritime Customs Officer LA Lyall said it even better, and evoking thoughts for today too:

‘The British residents in Shanghai are the spoilt children of the Empire. They pay no taxes to China, except that landowners pay a very small land tax, and no taxes to England. Judges and consuls are provided for them; they are protected by the British fleet, and for several years they have had in addition a British army to defend them; and for all this expenditure the British taxpayer pays.’

Of course the more bellicose Brits in Shanghai who had long had it both ways – i.e. paid no taxes, but got regiments and gunboats – responded as expected. The North-China Daily News wrote ‘…the most objectionable misrepresentation…’ and reprinted any number of letters of the “Angry of Bubbling Well Road” variety.

‘History doesn’t repeat itself but it often rhymes’ – Mark Twain (reputedly).

(For ore on Ransome’s trip to Shanghai see the chapter in my collection Destination Shanghai – Blacksmith Books, 2018)

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