Commonwealth anti Foreign
CHINA'S ORDEAL : II. FOREIGN HELP
By GUENTHER STEIN
FOREIGN assistance to the Chinese armies during the first eleven months of the war was considerable and conspicuous, although actually not half as large as the help from abroad which was quietly enjoyed by their enemy. In China's case it consisted almost entirely in moderate imports of ready-made arms and ammunition and in some direct military advice, of which Japan certainly wanted and received less than China. But the well-developed Japanese war-machine derived disproportionately greater advantages from huge foreign supplies of industrial equip- ment, semi-finished goods, and raw materials without which it would already have come to a standstill, and from much valuable technical advice, including manufacturing licences of vital importance, both from private foreign firms and from armament specialists of certain foreign governments ; and even the supplies of modern, high-class foreign armaments to Japan are not insignificant.
At present, China seems to be facing a crisis with regard to the continuance even of that restricted measure of foreign assistance. First of all, with regard to foreign military advice. For Chiang Kai-shek's loyal helpers, the German ex-army officers who had been with him for fully nine years, are now to be withdrawn by their government. Some of them may disobey orders and stay on, some may not really be needed any more, and several factions in the Chinese armies may even be glad to see most of them go, either because of their own nationalistic ambitions or in order to instal new advisers from other countries, Russians in one case or officers from democratic countries in the other. However that may be, the German-Japanese order for the speedy return of these officers will entail a certain dislocation in part of China's military administration, if not even some change of strategy, for fear that vital information may leak out to Japan through erstwhile advisers who may have to report fully about all they know and did, without considering personal loyalties.
The problem of the supply of foreign arms and ammunition is more serious and more intricate. Here, too, the announced discontinuance of German assistance, if it should not prove to be a mere face-saving device for Japan and to be circum- vented by more indirect ways of supplying China from Germany, would be the main cause of probable future difficulties. Germany, so far, seems to have been responsible for more than one half of all such Chinese imports, with Italy, the other ideological ally of Japan, the second in importance until recently. Will other countries be willing and able in present circumstances to fill whatever gap might be opened, and at what delay ? Will the considerable German shipments which are now on their way to China still be delivered, or will they be diverted to the enemy ? In themselves, these questions would not be so crucial if China could be sure that Canton, her last remaining port, will long remain open to such imports, for the accumulated supplies of foreign arms and ammunition in China are supposed to cover the requirements for a good number of months, if not, as the Chinese profess, for almost a year.
But Canton's days may be numbered. Japan's alleged anxiety not to antagonise Britain by more effective inter- ference in South China, i.e., in the neighbourhood of Hong-kong, has only recently been proved to be non-existent. The southern port of Amoy, a centre of British business, was occupied immediately after the signature of the provisional Anglo-Japanese agreement about the Chinese Customs revenue in occupied ports, which was regarded by Tokyo as a welcome sign of British acquiescence in Japanese actions rather than the contrary. The Japanese Navy, recently, is getting more active with minor assaults on Chinese craft and Chinese islands in the waters around Hong-kong. And Japan's desire to stop German arms shipments via Hong- kong-Canton may in itself foreshadow a more drastic blockade, such as would have been embarrassing as long as one of the " axis "-partners was bound to be the main sufferer from it. The Chinese defences in Kwangtung province are very strong now, and the Japanese might have to land with something like six full divisions in order com- pletely to cut off its capital, Canton, and to paralyse the Canton-Hankow railway, which, at present, is China's life- line. Yet the possibility of such action has become more real, once more, than it has been for the past several months.
And if it were carried out, the new Chinese overland routes to French Indo-China, British Burma, and Soviet Russia, which are either still incomplete or at least in pocr condition and tremendously long, would hardly be a satis- factory substitute for this direct artery from the sea to the present headquarters of the Chinese Army.
In the meantime, the most acute problem for China is that of providing sufficient foreign exchange to pay for whatever deliveries of foreign arms and ammunition she may still be able to secure. Here, too, difficulties seem to be ahead. China's reserves of silver, gold, and foreign credit balances are steadily diminishing, and although they may still be sufficient to finance the big surplus of imports over exports until the end of the year or even somewhat longer, there is no certainty yet that their eventual exhaustion will be compensated by substantial credits from abroad. But China does not give up hope that Western nations, having such a large stake in China which would be endangered even more than it is already if Japan should be able to gain a sweeping victory, will eventually find a way to help both China and themselves by means of financial accommo- dation.
China continues to sacrifice considerable amounts of foreign exchange in order to keep up its international credit. For this is the only reason why the Chinese Government, by allotting something like two hundred thousand pounds sterling each week to banks and importers in Shanghai, mainly foreign, still recognise their responsibility for financing the greatest part of that port's commercial transactions, even though it is isolated in conquered territory, and unable to reciprocate by aiding the cause of Government China. It is as if the French Government, during the World War, would have provided neutral and enemy importers in Lille with gold and foreign exchange, in order to facilitate the imports from foreign countries to that city while it was under German occupation. And it means that China, for the sake of her credit, is giving British and other local foreign business men a much better deal than Japan does where she has taken full charge. For in North China ports foreign business has almost come to a standstill and gradually succumbs to Japanese " competition," because Japan does not hold itself responsible to provide any but her own business enterprises with their requirements of foreign exchange. Just the same, the rate of the Chinese dollar, being dependent on the Shanghai market and exposed to local Japanese bear attacks, has not been maintained, and has been forced down by about one quarter.
It seems as though the time will come rather soon when Britain and other Western countries interested in the future of an independent China will have to make up their minds how to support the country's own efforts, admirable and by no means unpromising as they are, and to balance the in- finitely greater assistance which Japan succeeds in securing from the world in her undeclared war. China_ did not get much help from abroad, so far, and only comparatively little will be required in the future to make her hold out effectively, and for a long time.
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