Switching now from the economic to the political scene, there seems to be as yet no point of reconciliation arrived at. Japan has not altered her policy to pursue to the end the eradication of the Chiang regime. China, on the other hand, continues her resistance and announces the intention to go on with it indefinitely. So the prospects of an early peace seem remote, The prolongation of hostilities means inevitable economic weakening on either side. Overwhelming authority has it that the gains from the monopolistic activities are not sufficient to pay for the cost of the war, and that a Japan, financially unaided, would have to face narrow straits, The Chinese, deriving help from Russia in the'form of war goods and with a modicum of currency stability, plus the advantage of living off their own soil, are enabled to-carry on. A chronic state of hostilities would find the country in greater impoverishment and chaos.
The horizon of foreign relations is clouded with the probability of a unilateral denunciation by Japan of the Nine-Power Pact which erystallized, at the Washington Conference of 1921/2, an international under. standing vis-à-vis China. This was an agreement to guarantee the sovereignty, independence, territorial and administrative integrity of China, The powers committed themselves to aid China to keep a stable government. It stipulated equal commercial opportunity for all nations, and it restrained the signatories from seeking special privileges in China at the expense of other"nations, Circumstances Alter Cases In pect of this situation, the Japanese are now saying, in effect, that circumstances alter cases, and it is strongly indicated that they are going to formulate a positive plan for treating with various questions which involve third powers in China. It is expected that Japan will soon be in position to start "dealing definitely" with the latter. The feature of the Government's worl out plan lies in "Japan's grim determination to establish bloc co-opera tion between Japa, Manchoukuo and China."
Reuter gives the plan as declared by the "Kokumin Shimbun" as follows: a political complex and which circum-(2), All treaties and contracts bearing Tche China's sovereignty, including the Nine-Power Pact must be renounced or revised.
(2) All public utilities or public services in China, including communications, gri exchanges, railways and ihe control of foreign trade, must be conducted by China independently, as Japan cannot allow foreign powers to interfere in such undertakings for fear Of reducing China to a_semi-colonial Country for the western Powers.
(3) Japan's predominance in the fields of national defence, political administration and economy in China must be recognized by foreign powers.
(4) Economic activities of nationals of Third Powers in China must be limited within the extent of China's independence aba her national defence must not be hampered.
(8) Japan's ce-operation with China in the fields of national defence, political administration and economy, will be incomparably more extensive than that s of foreign powers, because Japan has vital relations with China in matters Of national defence and economy.
(8) New China must not be interfered with by Third Powers in the development of her national resources, necessary for the defence of East Asia and the management of various undertakings and industries necessary for military purposes including railways, harbours, shipping, the munition industry, motive-power- industry.
The foregoing six points complete have been given in their own text because they seem to be weighted with much significance. However that may be, Japanese activities in the economic field of the occupied areas have roused great alarm among interests of Third Powers who, acting in concert, have cabled strong protestations to their respective Home Governments.
Text read from the printed page and cleaned; old type leaves the occasional error.