London, July 13.
The Manchester Guardiat's diplo-marie correspondent writes from Berlin that from the beginning of the conflict between China and Japan, Germany's advisers in China have repeatedly, but without avail, warned Nazi. leaders against a too pro~Japanese policy, Now, he continues, a confidential report to Berlin from the German Chamber of Commerce in Shanghai emphasizs that Germany favourable position in China befóre the war has completely changed.
Not only have the lack of foreign currency, the alleged Japanese refusal to allow the transfer of goods in Japanese occupied provinces, and the high premiums demanded by German insurance companies, compared with other countries, damaged business, but the Chinese show a disinclination to buy German goods owing to Germany's political attitude, Chinese force continued to offer stiff resistance east of the town, An as-gault on the town was started by the Japanese' on Tuesday.
The Japanese Morimoto detachment turned the tables on Chinese troops which had been besieging a Japanese unit in Yuncheng.
A dispatch from Taiyuan, the Shansi capital, said Japanese operations had entered a second stage with Japanese units seeking to trap and wipe out Chinese troops in mountainous districts.
It has been estimated that Chinese troops which entered Shansi from Shensi and the Lunghai Railway sec-for after the fall of Hsuchow and Kaifeng numbered as many as 40 divisions,
Text read from the printed page and cleaned; old type leaves the occasional error.