Smuggling in North China After her failure in Outer Mongolia,
and the collapse of the plan to create an " autonomous " government for five northern provinces. Japan has turned to other methods of penetration in _North China and of weakening the Nanking Government. Under the terms of the Tangku Truce, the Chinese customs officials in the demilitarised zone between Peking and the Great Wall are disarmed by land and sea, and are thus powerless to stop the enormous smuggling trade in Japanese goods now entering the Tientsin area and deliberately promottod by the Japanese. According to Sir Frederick Maze, Inspector-General of Chinese Maritime Customs, the traffic inflicts on the Nanking Government a loss of revenue of £6,000,000 in a full year. Since the service of China's foreign loans is secured on the customs revenue, the smuggling traffic is a serious menace to the credit and security of the Nanking Government and to the financial interests of China's foreign bondholders. Equally it threatens to destroy the commercial interests of foreign countries, especially Great Britain, in North China. If it continues, it may involve Japan in severe commercial reprisals : and will leave Chiang Kai-shek with no choice between further capitulation to Japan, which he cannot undertake without endangering his Government, and open resistance, which may involve him in war.
* * *
Previous page
