Xi Jinping in His Own Words
What China’s Leader Wants—and How to Stop Him From Getting It
EVER since the demise of the Anglo-Japanese Alliance after the Washington Conference of 1921-22, the Far Eastern policy of the United States has apparently been based upon the assumption that British and American interests in China are identical. For this reason Washington has taken it for granted that in the Orient London will pursue a policy parallel to that of the United States. But this assumption has in fact not always been justified by events during the last eighteen years, for Britain's Far East policy has often run counter to the wishes of the American Government. True, the present war in Europe has momentarily given added support to the American theory of parallel action now that Britain finds it imperative to retain the good will of the United States. Yet the irony of fate is such that the same war is bringing about England's reconciliation with Japan.
After the World War, British opinion was divided as to whether or not the Japanese Alliance should be terminated. The British people in general, and Downing Street in particular, were in favor of keeping it alive. Several leading statesmen -- notably Mr. Lloyd George, Mr. Arthur Balfour, Lord Curzon and Lord Lee of Fareham -- were also of this opinion. At an imperial conference held at London in 1921, India, Australia and New Zealand expressed themselves against the abrogation of the Alliance, though Canada, presumably under American influence, insisted upon its termination. Meanwhile Washington had made up its mind to break up the Alliance by any means. Secretary Hughes even intimated to the British Ambassador in Washington that if England refused to part company with Japan, Congress might register its displeasure by passing a resolution recognizing the Irish Republic.
The American Government took this firm stand against the Alliance in spite of assurances from both Japan and England that under no circumstances would it be invoked against the United States. As revised in 1911 the Alliance absolved England and Japan from any obligation to go to the other's aid if one of them were involved in a war with the United States. This provision was embodied in the following terms: "Should either High Contracting Party conclude a treaty of general arbitration with a third Power, it is agreed that nothing in this Agreement shall entail upon such Contracting Party an obligation to go to war with the Power with whom such treaty of arbitration is in force." Unfortunately, the American Senate failed to ratify the arbitration treaty which Britain concluded in order to give effect to this article of the Alliance. Nevertheless, both Tokyo and London made it clear that they considered its provisions fully effective, since they held that the Bryan Peace Commission Treaty of 1914 was a general arbitration agreement. Yet this explanation did not satisfy Washington.
Why did Britain continue to desire the Alliance even after the German menace had been eliminated? The answer is that England was now faced with a totally new danger, that of Communist revolution along the Asiatic fringes of her empire in Afghanistan, India and China. In order to cope with this new peril Britain maintained friendly relations with Japan. She knew, of course, that Japan herself had become a rival, a dangerous rival, in China; but that was only added reason for regarding the Alliance as essential to British interests. This reasoning was not paradoxical. England believed that she could restrain Japan's ambitions in China by befriending her. Up to the very eve of the Washington Conference, Britain and the Dominions, except Canada and South Africa, hoped the Alliance could somehow be saved. With that hope in mind they proposed that an international conference convene at London to discuss the Far Eastern situation prior to the meeting at Washington. This plan was vetoed by the United States, which suspected that it was conceived in a desire to preserve the Alliance. In the end the American Government scuttled the Alliance at the Washington Conference and substituted the so-called Four Power Pacific Treaty.
The termination of the Alliance left Japan in no happy mood, for she had come almost superstitiously to rely upon British coöperation. In China especially, she had regarded British support as essential for maintaining her political and economic position. Quite naturally she felt as though the keystone had fallen out of her diplomatic arch when the Washington Conference tolled the knell of the Alliance.
But Japanese statesmen, though they knew that the American Government was responsible for the end of the Alliance, nonetheless adopted a policy of friendliness towards the United States and guided public sentiment so as to promote that policy. As they saw it, the World War had shaken the British Empire to its foundations, while the United States, on the other hand, had emerged as the greatest Power in the world. Japan had to face this fact in reorienting her diplomacy. They also knew that her growing influence in China might conflict with Britain's vast interests there, while she could foresee no such conflict with the United States, whose Chinese interests were small. It was no doubt these considerations which persuaded Tokyo to pursue a policy of friendliness towards Washington in preference to London.
The Japanese public was not fully informed as to the part played by Washington in terminating the Anglo-Japanese Alliance, but was allowed to gain the impression that England, having got all the good out of it, had then left Japan in the lurch. This widespread belief, coupled with a rising anti-British sentiment in China, rendered England's position increasingly difficult. Britain had consented to abrogate the Alliance in the hope that China, which had vigorously opposed it, would become more friendly. She had also hoped that, should her Chinese interests be seriously menaced by China or Japan, the United States, which had offered its coöperation in place of the Anglo-Japanese Alliance, would come to her rescue. Neither of these hopes was fulfilled.
By the beginning of 1925 it was evident that a putsch against British interests was about to take place in China. In the fall of 1926 the Chinese Nationalists -- partly financed by Moscow and guided by Borodin, Galen (later known as General Bluecher) and other Bolshevik emissaries -- surged through South China and established themselves in the Yangtze valley, long Britain's exclusive sphere of influence. They flaunted such slogans as "Down with the British" and "Away with British exploitation." Indeed, the success of the Nationalists' campaign was primarily due to their anti-British propaganda promising the masses that if British imperialism were put to rout all would be well with China. Downing Street sounded out Tokyo and Washington for help, but in vain. That Japan should be cool to the British request was understandable enough; but many Englishmen, remembering the American promise of coöperation at the Washington Conference, were disappointed with the aloofness of the United States. Under these circumstances Britain could only retreat before the Nationalist onslaughts.
And so His Majesty's Government, on December 18, 1926, proposed to the Powers signatory to the Washington Treaty that certain surtaxes which the Nationalists had levied on foreign trade in violation of treaty obligations be recognized and regularized. To this friendly gesture the Nationalists responded in January 1927 by forcibly seizing the British Concessions at Hankow and Kiu-kiang. In March, Nationalist agitation against the British in Nanking led to the looting of several foreign consulates and many foreign firms, residences and missionary institutions, and the murder or serious injury of several prominent foreigners. The situation became so deplorable that on May 9, Sir Austen Chamberlain admitted in the House of Commons that "the Nationalist Government have neither observed the spirit of the agreement signed at Hankow, nor have they made any attempt to reciprocate the friendly attitude which we have displayed towards them." And yet "His Majesty's Government are," Sir Austen declared almost in the same breath, "unwilling, even under such provocation as they have received, to abandon their hope that this friendly policy will presently evoke an equally friendly response from a Chinese Government freed from foreign domination and thus enabled to devote itself to the single-minded service of the interests of the Chinese."
Hitherto English businessmen in China had assumed that the Anglo-Japanese Alliance served to advance Japanese interests at their expense, and that once this pact was dissolved British influence and trade would again have smooth sailing. Now, however, they were sadly disillusioned, some of them frankly admitting their blunder in casting aside Japanese friendship. Boycotted by the Chinese, singled out for attack by "Red" agitators, and uncertain of the value of American friendship, these Britishers began to advocate a pro-Japanese reorientation in London's foreign policy.
In England, too, this sentiment found sympathizers, especially in Conservative circles. Although the Government itself had no intention of reversing the policy adopted at the Washington Conference, it nevertheless felt that Britain's termination of the Alliance with Japan had placed her in no bed of roses. This feeling was the more poignant since the American attitude towards the English in China seemed to be one of rivalry rather than of cooperation. When Downing Street made its proposal that the Powers should regularize the Nationalists' illegal levy of surtaxes upon foreign imports, Washington felt -- at least it was so stated in American newspapers -- that Britain had stolen a march on the United States by attempting to play the "big brother" to China, a rôle it had long considered an American monopoly. In any event, Secretary of State Kellogg, in a public statement on January 26, 1927, went much farther than the British in this Chinese tariff question. Mr. Kellogg emphasized American solicitude for China's "unity, independence, and prosperity," and declared that "the United States is now and has been ever since the negotiation of the Washington treaty prepared to enter into negotiations with any Government of China or delegates who can represent or speak for China not only for the putting into force of the surtaxes of the Washington treaty, but entirely releasing tariff control and restoring complete tariff autonomy to China." It looked as though the winning of Chinese good will had become a matter of rivalry between Washington and London. And indeed, on July 25, 1928, Secretary Kellogg surprised the world by making public the text of a brief treaty which had been hastily signed by Mr. T. V. Soong, the Nationalist Finance Minister, and Mr. John V. A. MacMurray, the American Minister at Peiping, and in which the United States recognized "the principle of complete national tariff autonomy" for China -- a recognition which Britain was unwilling to grant.
Such was the history of the divergences between British and American policies vis-à-vis Japan and China during the decade following the World War. These differences were thrown into still clearer relief by the Manchurian "incident" of 1931. To frustrate Japan's designs on Manchuria, Secretary of State Stimson repeatedly urged the League of Nations, whose interest in the crisis seemed only half-hearted, to take measures strong enough to check Japanese aggression. He also made several direct approaches to Downing Street. His final proposal was that England and the United States jointly invoke the Nine Power Treaty, because -- as Mr. Stimson says in his book "The Far Eastern Crisis" -- economic sanctions against Japan "would have more chance of being adopted by Congress if it were recommended following the invocation of the Nine Power Treaty than if it had been recommended solely by the League of Nations." Several times Mr. Stimson called Sir John Simon on the trans-Atlantic telephone, and each time the British Foreign Secretary's reply was so lukewarm and uncertain that Mr. Stimson had to admit that "my plan was blocked" and that "the British non-joinder obviously killed the possibility of any such démarche." In the British view, Manchuria was merely an outlying territory of China where British interests were small and from which England could gracefully retreat with no vital sacrifice. British statesmen believed that the part of wisdom for Britain was to keep Japanese friendship in order to preserve their much larger interests in China proper during the years to follow.
Under its non-recognition doctrine the United States treated Manchukuo as if it were an outcast. The English, on the other hand, in 1934 sent there an economic mission led by Lord Barnby and representing the powerful Federation of British Industries. The mission was "unofficial" and "non-political;" but no one, reading its highly favorable report on Manchukuo, could help attaching to it a greater significance than met the eye. A year later an American economic mission made a tour of the Far East, but studiously avoided Manchukuo and in its report said not a word about the economic prospects of that area. It is hard to believe that American businessmen could have been so sentimental except under political influence.
On April 18, 1934, the Japanese Foreign Office, through Mr. Eiji Amau, Chief of the Information Bureau and so-called "spokesman," issued a statement enunciating a principle which was regarded abroad as an imitation of the Monroe Doctrine. Its English version, as given out in Tokyo, was vague in meaning and very clumsy in phraseology. The translation published the same day by the British Foreign Office was much clearer. It said in part: ". . . supplying China with war aeroplanes, building of aerodromes in China and detailing military instructors or military advisers to China, or contracting a loan to provide funds for political uses would obviously tend to alienate friendly relations between Japan, China, and other countries and to disturb peace and order of Eastern Asia. Japan will oppose such projects. The foregoing attitude of Japan should be clear from policies she has pursued in the past, but on account of the fact that positive movements for joint action in China by foreign Powers, under one pretext or another are reported to be on foot, it is deemed not inappropriate to reiterate her policy at this time."
The Japanese were moved to make this declaration as a result of several alarming rumors. For one thing, it was reported that powerful American interests had been supplying China with military planes and pilots and had even obtained a concession to build an airfield at a point on the Fukien coast eighty miles from a Japanese naval harbor off Formosa. For another, Sir Frederick Leith-Ross, Financial Adviser to the British Government, had been evolving a plan to give China considerable financial aid. Then too, the League of Nations had been sending various experts to China to find out how best it could help the Nanking Government.
On April 30, Mr. Hull issued a formal statement, of which the tenor is indicated by the following sentence: "In the opinion of the American people and the American Government, no nation can, without the assent of the other nations concerned, rightfully endeavor to make conclusive its will in a situation where there are involved the rights, the obligations and the legitimate interests of other sovereign States." The American Ambassador at Tokyo was instructed to reiterate these views to the Japanese Foreign Office.
The British Foreign Office, however, talked in another language. On May 18, 1934, Sir John Simon told the House of Commons that the Nine Power Treaty contained no provision whereby "this country undertook to respect and preserve the integrity of Chinese territory." "It is not true," he declared, "that we have ever signed, or . . . anyone has signed, a treaty with China in which we have pledged ourselves to use all our forces to preserve the territorial integrity and political independence of China including Manchuria." Furthermore, the British Foreign Office seems to have inclined to the belief that the activities of Sir Frederick Leith-Ross in China were inimical to England's friendly relations with Japan. An Associated Press dispatch, dated London, November 26, 1935, reported that the "British Foreign Office disapproves his [Sir Frederick's] whole mission and particularly disapproves the wordy exchanges . . . between him and the Japanese," and that while his activities were supported by the Treasury the "Foreign Office believes . . . that any attempt to restore China's finances is doomed until there is political agreement between China and Japan."
All this seems to justify the assumption that the abrogation of the Anglo-Japanese Alliance did not change the basic principle of British policy towards Japan -- that an aggressive Japan could best be restrained, not by fault-finding and nagging, but by friendliness and conciliation. Since the outbreak of Sino-Japanese hostilities in July 1937 this policy has been put to a severer test than ever before. The sinking of the British gunboat Ladybird in the Yangtze and the bombing of the motorcar in which the British Ambassador to China was travelling from Nanking to Shanghai, even though accidental, taxed British pride. The Japanese blockade of the British Concession at Tientsin caused Mr. Chamberlain to say in the House of Commons on August 4, 1939, that "it makes my blood boil to hear and read some things that have been happening there." And yet, in spite of all the exasperating things which have been happening in China, the indications are that England, following her traditional policy, will eventually come to terms with Japan.
At the Brussels Conference, called in November 1937 to condemn Japan's acts in China, Mr. Anthony Eden, the British Foreign Secretary, was obviously content to play second fiddle to the American delegate, Mr. Norman H. Davis. The resolution adopted by the Conference was mainly the work of the American delegation. The Japanese interpreted these facts as another evidence of Britain's reluctance to make herself the butt of Japan's enmity, a reluctance that became more and more pronounced as the European situation deteriorated.
On July 15, 1939, the British Ambassador at Tokyo, Sir Robert Craigie, opened conversations with the Japanese Foreign Minister, Mr. Hachiro Arita. The British authorities at Tientsin had rejected a Japanese demand that four Chinese terrorists, who at a point inside the British Concession had assassinated the pro-Japanese superintendent of the Tientsin Customs, be handed over to the local Chinese court for trial. The Japanese had replied on June 15 by blockading the Concession. In reality, England hoped that the settlement of the Tientsin affair would prove a starting point for the improvement of Anglo-Japanese relations along broader fronts.
By July 24 the conferees had agreed upon general principles applicable not only to the Tientsin imbroglio but to the Chinese situation as a whole. On that day Sir Robert therefore signed the following memorandum:
His Majesty's Government in the United Kingdom fully recognise the actual situation in China where hostilities on a large scale are in progress and note that, as long as that state of affairs continues to exist, the Japanese forces in China have special requirements for the purpose of safeguarding their own security and maintaining public order in regions under their control and that they have to suppress or remove any such acts or causes as will obstruct them or benefit their enemy. His Majesty's Government have no intention of countenancing any act or measures prejudicial to the attainment of the above-mentioned objects by Japanese forces and they will take this opportunity to confirm their policy in this respect by making it plain to British authorities and British nationals in China that they should refrain from such acts and measures.
When the British memorandum was made public, Washington was agog. Outwardly the State Department maintained a decorous silence. Nevertheless, on July 26, two days after the Craigie-Arita understanding had been made public, it notified the Japanese Embassy of its decision to abrogate the American-Japanese Commercial Treaty of 1911. Was there any connection between this sudden American move and the Anglo-Japanese agreement at Tokyo? In Tokyo, at any rate, the American notification has been interpreted as a move to bolster the "wavering" British. The Japanese Foreign Office, in response to persistent public clamor, let Mr. Seijiro Yoshizawa, Chief of the American Affairs Bureau, explain the American move over the nationwide broadcasting system. "On July 26, at 4 p.m. (July 27, 5 a.m. Tokyo time)," he said, "the State Department handed to the Japanese Embassy a very brief note for treaty termination with the verbal advice that the document spoke for itself, that no further explanation was necessary, and that it would be given to the press at once. Only at the Embassy's request was its publication withheld for a few hours to give the Tokyo Foreign Office just enough time to receive the note before it was flashed across the Pacific by the press." Why, asked Yoshizawa, was the abrogation done so suddenly? "Perhaps," he suggested, "the American move had something to do with the Anglo-Japanese conversations which had been in progress in Tokyo."
The Craigie memorandum of July 24 was duly communicated to Washington by the British Government. To the questions which the State Department doubtless asked, the British apparently replied with assurances that though no change was contemplated in their policy of Anglo-American coöperation, they regretted that the European situation did not permit them to pursue in China a course exactly parallel to that of the United States. This much at least was gathered from Mr. Chamberlain's address before the House of Commons on August 5, 1939, when he declared that "if the British Government says it does not regard this formula [the Craigie-Arita memorandum] as making any change in our policy, as indeed it does not, that is much more important than the alteration of words in a formula which has been arrived at after much difficulty and hours of discussion." In reply to a question as to why Britain could not follow the American example and denounce her commercial treaty with Japan, Mr. Chamberlain pointed to the "fundamental difference of the United States of America and its isolation from Europe and this country," and said that "we would much rather settle our differences with the Japanese by discussion and negotiation." The Prime Minister concluded with these words: "We shall endeavour to show patience and to exercise reasonable moderation, recognizing that behind all these outrageous things [done by the Japanese] there may be some genuine suspicion on the part of the Japanese in China about our treatment of them, but above all let us not forget that there may be even graver and nearer problems to be considered in the course of the next few months."
Besides the threat of war across the Channel, Downing Street had to consider the possibility, even probability, of Japan's joining the Berlin-Rome Axis, not only to combat the Comintern but to form a united military front against England and France. Even while Mr. Chamberlain was uttering the above-quoted words, Berlin and Rome were moving heaven and earth to obtain a quick and favorable decision from Japan. In Tokyo too a powerful group had been vigorously working to push Japan into the projected triple alliance. What would become of Hong Kong and of Britain's tremendous investments in China, were Japan to ally with Germany? Worse, what would happen in India if Japan were to sweep British influence from East Asia? Would not Australia, New Zealand and the British possessions in the South Pacific be opened to an attack by the Japanese Navy? Certainly, these questions received a most serious consideration at Whitehall during the critical days of August 1939.
Hitler's scuttling of the Anti-Comitern league by joining hands with Stalin made the situation even more ominous, for Berlin now urged Tokyo to come to terms with Moscow so that a great bloc extending from the Rhine to the Pacific might be created. This, coupled with the abrogation of the American commercial treaty with Japan, was a portent which England could not ignore. Indeed, history does not lack instances in which American pressure or antagonism drove Japan into Russia's arms. Secretary Knox's famous Manchurian railway scheme to "smoke Japan out," as he expressed it, led to the Russo-Japanese Convention of 1911. The hostility of the United States towards the Sino-Japanese agreement resulting from the so-called "Twenty-one Demands" was largely responsible for the virtual alliance between Tokyo and Moscow in 1916. The enactment in 1924 of the American Immigration Law with Japanese exclusion clauses was followed by Japan's recognition of Soviet Russia.
The Anglo-Japanese conversations at Tokyo were suspended soon after the United States notified Japan that it was terminating the treaty, largely because -- so the Japanese believed -- Downing Street was momentarily heartened. But the suspension was short-lived, for following the outbreak of the European War in September 1939, England has felt more keenly than ever the need for better relations with Japan. But before Britain can establish such relations, she must meet Japan halfway in the spirit of the Craigie-Arita memorandum of July 24, even if this runs counter to American wishes. In July Britain had already consented to hand over to the native police the four Chinese terrorists and had also agreed to certain measures of coöperation between the British Concession police and the Japanese authorities at Tientsin. What remains for further discussion is the Japanese demand that the silver worth about £8,000,000 held by a Nationalist bank in the Concession be turned over to the Japanese-sponsored New Chinese Government at Peiping, and that the fapi, or legal currency of the Chiang Kai-shek régime, be prohibited within the said Concession.
At this writing both the silver and fapi questions seem about to be settled. And when these matters are out of the way, the blockade of the British and French concessions will be lifted, even though the Japanese forces on the spot may prove recalcitrant.
On March 28, 1940, only two days before the inauguration of Wang Ching-wei's secessionist government at Nanking, Ambassador Craigie surprised the Japanese -- and the Americans -- by making a very significant speech plainly bidding for Japan's friendship. Said Sir Robert:
Bearing in mind the declared intentions of the Japanese government and the measure of success already achieved, I have a definite feeling of confidence in the future of Anglo-Japanese relations . . . . Japan and Great Britain are two maritime powers on the fringe of great continents and they are vitally concerned with the covenants in those continents . . . . Methods may differ but both are ultimately striving for the same objective -- a lasting peace and the preservation of our institutions from extraneous and subversive influences. It is surely not beyond the powers of constructive statesmanship to bring the aims of their national policies into full harmony.
Again there was a stir in Washington. What a difference, in tone and implication, between Sir Robert's address and Ambassador Grew's famous "straight-from-the-horse's-mouth" speech delivered in Tokyo the previous October! But London took pains to explain that the Craigie speech had no political significance. Lord Halifax in the House of Lords, and Mr. Butler in the House of Commons, stated that there was no question of any change in British policy in China, though they added that this attitude was not incompatible with a wish to see an improvement in Anglo-Japanese relations. Nevertheless, neither Sir Robert nor his Government could have failed to foresee that the Japanese were bound to read political significance into such a speech. Three days after it had been delivered, Secretary Hull issued a statement denouncing, in language more vigorous than he had used in any of his previous statements on China, the inauguration of the Wang Ching-wei régime. Meanwhile, Downing Street was eloquently silent on the advent of the new Nanking Government. Here was a clear indication of the relative position of London and Washington vis-à-vis the Sino-Japanese situation.
Today, while the United States is buzzing with talk of an embargo against Japan, the British are thinking of extending their trade with her. The Anglo-Iranian Oil Company, whose stock is mostly owned by the British Government, has agreed to sell Japan a million barrels of crude oil -- an agreement likely to be expanded. The British Foreign Office may be cautious in taking advantage of the American abrogation of the commercial treaty with Japan; but the Treasury and the Ministry of Economic Warfare are understood to be in favor of developing trade opportunities in and with Japan and China. It is considered quite possible that Britain will increase her purchases of Japanese foodstuffs and also reduce tariffs on Japanese textiles imported into India, thus giving Japan the necessary exchange to purchase cotton, oil, machinery and other goods from the British Empire.
Many Americans may regard Britain's concessions to Japan as shocking, as a betrayal of her promise to coöperate with the United States. They have been wont to believe that British and American interests in China were identical. It has seldom occurred to them that this community of interests is subject to severe restrictions. Great as is Britain's stake in China, it sinks to relative insignificance when compared with her infinitely greater stakes in other parts of the world, above all, in Europe. The position of the United States is quite different. Free from European entanglements and blessed with an advantageous geographical position, it can concentrate its attention upon the Far East.
Yet the United States has no stake in East Asia other than the Philippines and the Open Door in China. Neither of these interests is vital to the United States; but because it has no other interests in the Far East, it can, if it wishes, devote an undivided attention to them. Particularly in regard to China, it can take vigorous measures against Japan as a sort of hobby, confident that no matter what the Japanese do in retaliation, none of its vital interests will be hurt. On the other hand, England's interests in China are of such magnitude that she cannot apply pressure upon Japan without exposing them to grave danger.
Both the Japanese and the Wang Ching-wei Governments have repeatedly promised to respect the legitimate rights and interests of third Powers in China. Much significance attaches to the qualifying word "legitimate." Is extraterritoriality legitimate? Are foreign settlements and concessions legitimate? Even if the Wang Ching-wei régime considers them "illegitimate," it will take no precipitate action to abolish them, but will allow time for readjustment. Are not the Powers themselves, including the United States, committed to the termination of these imperia in imperio within a reasonable time? As for Britain, she evidently believes that her purely or essentially economic interests can best be served by friendliness towards Japan. Take for instance the British attitude towards the Yangtze River trade. There were 35 British ships totalling 68,000 tons engaged in that trade as compared to 8,400 tons of American and 35,000 tons of Japanese shipping. Yet England has never protested to Japan against the temporary closing of the Yangtze as a military measure so vigorously as has the United States. Washington received from Japan prompt apologies and a check for $2,214,007 for the sinking of the gunboat Panay and for the damage done to three Standard Oil ships by Japanese bombers along the Yangtze on December 12, 1937; London is still waiting for a settlement due for the sinking of the gunboat Ladybird on the same occasion.
On Japan's part there is now a perceptible tendency to appreciate the British attitude, particularly as she feels that her traditional policy of preserving American friendship has proved futile. For economic and other reasons Japan's natural preference is for American rather than for British good will. Since the beginning of the hostilities in China she has endeavored to respect, as far as practicable under the exigencies of military operations, American property and American rights, while she has shown no such solicitude for British interests. Now she feels herself forced to reorient her course. If her relations with England improve, the latter's vested rights in China will be treated with more respect. For one thing, vast British railway loans to China which have been in default for many years will be resuscitated if the railways, with the assistance of Japanese technicians and experts, emerge from chaos. England no doubt finds encouragement in this respect in what the Japanese have done for the British-financed Mukden-Shanhaikwan railway in Manchuria. For many years prior to the creation of Manchukuo under Japanese guidance, the income of this railway had been misappropriated by the local warlords, leaving nothing for interest or sinking fund. Promptly upon the appearance of Manchukuo in 1932, the new Government, acting upon Japanese advice, paid all back interest, and has since been punctually paying the sums necessary to service the British loan.
Japan, though discouraged by the United States' adamantine attitude towards her, still sees a ray of hope in the statement made by Secretary Hull on March 30 of this year. This statement, while it condemns the inauguration of the Wang Ching-wei régime, contains a significant sentence: "This Government again makes full reservation of this country's rights under international law and existing treaties and agreements." This idea is the leitmotif running through all of Mr. Hull's pronouncements on the Sino-Japanese situation. It is not a new idea; it simply follows America's traditional policy of the Open Door in China enunciated by John Hay forty years ago. That policy looks upon China's Open Door and territorial integrity as a means to an end -- and that end is the preservation and promotion of American commercial interests. Secretary Hay himself raised no objection to spheres of influence already established as long as they did not prejudice the equal commercial opportunity of other nations. Japan believes that if American policy can be made to conform to this tradition there is still hope, given reasonable time, for a rapprochement with Washington.