"The establishment. of peace and Jorder and the expansion of industries '¥e|notably benefited all other countries Jconcerned including Great Britain and. me United tates whose trade with /Manchoukuo is showing a marked increase in. volume as compared with years prior fo the Manchurian In-
"Such results would not have been possible but for Japan's devotion to ther mission of enlightened progress fond her unselfish ce-operation and contribution toward the healthy progress of Manchoukuo.
"As regards the present China JAffair, the basic policy and resolute [etm of the Japanese Government have been set forth in their statement of November 3 last year.
Terms Oftered "New China"
"Under the date of December 22 last the Japanese Government issued Jonother statement declaring their intention of joining hands with farsight-/ed Chinese animated by similar ideals Jand aspirations and to work together for the common purpose of constructing @ new East Asian order and for the realization and mutual practice of neighbour ly "amity, economic _cooperation and joint defence against Communism.
"t_was also announced that what JJapan asks of China is neither teritary nor indemnity for the cost of military operations and further that, Jnot only will Japan respect the sovereignty of China, but she is even prepared to give practical considera tion to the questions of abolition of extraterritoriality and the rendition of {foreign concessions and settlements, matter which is obviously required for China's complete independence.
"In all these declarations are Jenunciated the ethically-conceived na-tonal policy of Japan.
Despitarepeated explanations given Joy the Japanese Government there persist unfortunately misunderstandings in certain quarters abroad cribing to Japan the intention to close the door of China, construction Era Begun "The China Affair has now entered Jo new stage as the result of the fall of Canton and Hankow.
"While we will not relax our efforts or the overthrow of the anti-Japanese regime we are obliged at the same time to address ourselves earnestly the work of construction.
"although the Chiang Kal-shek: regime is still professing its policy of the so-called long-term war it has Jalready fled into a remote province Jand has become a purely local regime while, in the regions under the occupation of our forces, sentiment 1s growing rapidly against the Comintern Jand in favour of friendship with Japan.
"The 'Provisional Government' and the 'Reformed Government,' at Pel-ping and Nanking respectively, and the' Autonomous. Government' of [Mongolia are all making healthy progress and steadily winning popular [support and confidence.
"Moreover, in the fall of last year, Jo. joint commission was formed the 'Provisional' and "Reformed" gov: jemments; and movements are coming to a head in Hankow and Canton for the establishment of other local gov-
"It ig hoped that a new Central IGovernment? may be - speedily organized and ce-operate with us for the seltiement of the present conflict.
"As for the recent Aight from [Chungking of certain leaders of the so-called peace faction in the Chiang Kai-shek regime, the Government are watching carefully for consequent
Text read from the printed page and cleaned; old type leaves the occasional error.