(Incorporated in Hongkong) offset this it is necessary to consider her gains. With the coastline completely under Japanese control a stranglehold has been placed upon Chinese trade, and the economic life of the country has been dealt a serious blow. It is true that some trade can be carried on by means of the Burma route and overland with Soviet Russia, and military supplies can be secured by the same means, but both channels have their disadvantages which are particularly noticeable when need for 799.avenue dos bubbling well road quick delivery is taken into consideration. But that is all the Japanese have secured. It is true that they are able to carry on a certain amount of business up the Yangtze, and are in fact doing so to the exclusion of everyone else, but it is to be doubted when ther, in view of the devastation which has been wrought, and the consequent reduced purchasing power of the Chinese, there is very much profit in it in view of the huge outlay to which Japan has been forced. For the rest the military position appears to be one of stalemate. The incursion into China as far as the railways lines mentioned was not, even making allowance for the resistance of the Chinese really a particularly difficult feat: it would have been much more difficult had the Chinese possessed anything like the equipment of the invaders. -Chiang Kai-shek and his government have withdrawn into the western fastnesses, which he always contemplated doing, and, though he and his forces can be reached by means of aeroplanes, the sending in of adequate troops to bring finality to the struggle is an entirely different proposition.
The Japanese boast that there is not now a.spot in China which cannot be reached by air is probably-true, but experience of the last few years has convincingly shown that a country cannot be subjugated by such
upon the bayonet, and armies. of occupa: means, and that ultimate Neve Senet Yt has been demonstrated that the areas through whi not in any In the under Japanese control the greater portion has not been really subdued, while the two Provisional governments set up in Nanking and Peiping have no effective jurisdiction beyond the range of a Japanese rifle. Thus militarily a position of stalemate has been reached, with, so far as it is humanly possible to judge, very small pro-44 spects of its being broken in the near future. Indeed the only chance of this coming about seems to lie in the possibility of there being some disruption within the ranks of the Chinese Government, of which there appears to be no sign at present. The defection of Wang Ching-wei has not proved to be the severe blow to the Chiang Kai-shek regime that some quarters appeared to believe, and it is by no means improbable that the manner in which that regime has withstood the shock of it means that in effect it amounted to accession of strength rather than of weakness. That is apparently recognized in Japan where the possibility of this struggle continuing another two years has now been openly admitted in authoritative quarters. If it is hoped by the Japanese, as appears to be the case, that they will recoup much of their expenditure by the exploitation of the country there is the possibility that even in this connection they are likely to be seriously disappointed. Passive resistance on the part of the Chinese, of which they are past masters, must inevitably contribute to that disappointment, and, if there are many in Japan who are asking whether after all the outlay in life, and treasure during the last two years has been profitable, it is not to be wondered at.
Text read from the printed page and cleaned; old type leaves the occasional error.