There has been a check in the negotiations between China
and Japan over the settlement of the Tsinan incident. Japan has not yet withdrawn the troops which she sent to Shantung during the Nationalist advance last year. Any agreement would. presumably have as its main points the withdrawal of these troops by Japan, and the cessation of the boycott of Japanese goods in China, who has: once more proved the efficacy of her boycotts. It is also possible, says- the Times, that Japan may consent to- -a revision of all her past treaties with China, on condition that China formally recognizes their validity, which the Nationalist Govern- ment has hitherto refu.se.d to do. As usual, the question, of " Face " plays a leading part. Meantime all the generals have left Nanking for the New Year celebra- tions (the Chinese New Year begins some time after our own, and the festivities last for about a fortnight). it is hoped that by the time they return the Nationalist Government will-have succeeded in •raising a loan of five million pounds for purposes of disbandment to be secured on additional revenue to be derived from the new Customs duties. We do not share the opfimism that foresees additional revenue, but without a loan it may prove impossible for them to begin disbandment. Until this is carried out there is little hope for the recon struction of Chinese trade. There is no certainty except the vice of the circle.
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