A Sino-Japanese Agreement ?
It is now certain that the Nanking Government has approached Japan with proposals for a permanent adjustment of Sino-Japanese relations. The proposals have been readily accepted in Tokyo, since they must mean that China is willing to accept Japan's fundamental demands. In return, Mr. Hirota's new economic plan for China includes a credit of 100,000,000 silver dollars for the Nanking Government—an obvious reply to the Leith- Ross mission. It includes also proposals for the creation of an economic bloc which shall include China, Japan, and Manchukuo. It seems clear that General Chiang Kai- shek is now willing to sacrifice China's economic and political independence in return for an opportunity to suppress the Communists, reform the finances and administration, and extend the territory of the Nanking Government. But his policy has its weaknesses. The students, terrorists, and extremists have already shown their opposition. This was to be expected ; but General Chiang's policy may well antagonise also that more wealthy and educated section of the Kuomintang which has so far been his support. The Communists, at least, have seized their opportunity and formulated a new policy based on a nationalist Chinese movement, uniting all classes, to drive out the foreigner and preserve China's economic and political independence. That • may well attract many of General Chiang's supporters, and it accords with the views of those who see China's only salvation in a revival of the alliance with Moscow.