'That Japan has been expecting to develop' her conquest in China by the use of foreign assistance has been perfectly clear from the commencement of the China Incident. The same has been frequently suggested by! various Japanese speakers and publicists, but the latest pronouncement on the subject comes from Mr. Sonyu Ohtani, president of the North China Development Ca. According to him imported materials from abroad, acquired either by a credit or through barter' arrangements will be used in the development of North China. He welcomed foreign investments in the large-scale economic pro-Jects which the Japanese have in mind. It is clear that foreign assistance is necessary. when it is estimated that no less a sum than. Yen 1,420,000,000 will be necessary to finance the various enterprises to be undertaken by
of which but one-quarter has been paid up. Another one-quarter, is to be called up, but it is apparent that the company will be unable to finance the whole of its schemes itself, and that debenture issues will be necessary to secure the rest of the money. The suggestion that materials can be secured either! by means of credits or through barter arrangements undoubtedly is inspired by the! fact that under the present financial system operating in North China it is impossible to obtain exchange, and if that cannot be arranged then the only course open is to secure credits in the countries of origin of the necessary materials, or to resort to the! barter system, no matter how clumsy that may be in this day and age. As matters stand at present the main money markets are closed to Japan. They are likely to remain 80, for it is obviously against the interests of the other parties to the Nine Power Pact finance what after all is a breach of that particular document. It would be a morally inexcusable thing to do in view of all that has happened, and would amount to a be-tradal of those very principles which have been enunciated in that most important agreement, Moreover it is in this very apparent future need for foreign funds that} Japan may find her greatest difficulties.
It should be quite plain by now tha¥ the Japanese hope that the big financial centres: of the world will readily agree to' a reorientation of trade policies vis-a-vis of China is doomed to disappointment. What the Japanese want is obviously a restatement) of the policy of the Open Door, closing the old thoroughfare for the free and equal trade of all countries, and opening a new one through which they are to be expected to our in capital money from the use of which Japan seeks to secure exclusive benefits. It would mean the sacrifice of all that has been built up during the past century by foreign traders in China, and the embarkation upon 4 new scheme of things which might have more permanence than that wath which Japan seeks to endow existing policy. It must be remembered that the amount which it Is stated will be necessary in North China before 1941, does not in any way represent Japan's total needs. There have also to be taken into consideration the sums which will be required for similar plans in Central, and, is to be supposed, ultimately South China, and if a total figure of something in the neighbourhood of Yen 5,000,000,000 is considered to be the minimum which will be necessary in the first stages of the proposed developments it may be regarded as a very conservative estimate. The expense to which Japan has already been put as the result of the past sixteen months fighting is not ascertainable, but there appears to be general. agreement amongst economists that while she has been able to finance hostilities without undue strain upon the nation's financial system, there are indications that money. is being spent at a rate which is already giving! cause for some anxiety amongst those fully apprised of the real situation. Japan may be and probably is able to finance the war for a considerable time to come, but in order fo make this adventure at all profitable it is apparent not only to the Japanese themselves, as witness Mr. Ohtani's remarks, but the world at large that huge sums' will be required before all the present outlay' can be transformed into a profitable invest ment.
It is perfectly obvious that the policy Japanese regard to neutral trade, the which is being pursued in China by' the discrimination at the various ports,' the! closing of the principal rivers and. other like actions, has been to accumulate a large! number of bargaining points the use of which, it is hoped may constrain other Powers to fall in with the Japanese view fo the basis upon which future financial and commercial relationships with this part of Asia shall be regulated. It might prove al successful policy if Japan's economic position were invulnerable, but it is apparent that it) {is not, and that to offset what Japan is doing in China, there is not only the withholding! lof the funds, without which Japan's military successes are nothing more than economic liabilities, but also other means which can be) depended upon to induce Japan sooner or later to modify her attitude. Despite some! original misunderstanding, Mr. Neville Chamberlain has made it quite plain that Great Britain is not prepared to change her role of a trader with China for that of a moneylender to Japan for her schemes of development. The same may safely be said of the United States and France, while there are few, if any other nations in a position to grant Japan that financial' accommodation Which "is so necessary. Consequently credits cannot be obtained, and it is diffeult to see how they possibly can be, then Japan {s forced back to the barter system, which means that the proposed developments can only proceed at a rate commensurable with the development of Chinese trade, and this, It is clear could only provide a comparatively small annual sum in place of the large amounts which are admittedly almost immediately necessary. That might very well result in a postponement of the time when Japan can expect to wrest a profit from her
Text read from the printed page and cleaned; old type leaves the occasional error.