CHINA AND JAPAN
By SIR JOHN PRATT
[" Every effort must be made to implement the unshakable national policy of establishing the Greater East Asia c_ prosperity Sphere by disposing of the China affair."—GENERAL Tojo, October loth, 194E] Y the fall of France in the summer of last year the fortunes of China were affected almost as gravely as those of Great Britain. When the Burma Road was closed, in order that Great Britain might gain the three-months breathing-space required in order to meet and defeat the Nazi onslaught in the autumn, the material damage to China's cause was slight, but the moral and psychological effect was great, and might have been dis- astrous to a less stout-hearted people. Japan had gained a foot- ing in Indo-China, and the closing of the Indo-China railway, as well as the Burma Road, left China with the desert road across Central Asia as her last remaining link with the outer world.
The Burma Road was reopened on October 18th, just over a year ago. China has continued to carry on the struggle, and the Japanese are no nearer achieving their main objective of bringing the " China incident " to an end. Every crisis in the war in Europe is echoed by a corresponding crisis, accompanied by much excitement, emotion and flurry, in Japan. When Hitler double-crossed his partner in the anti-Comintern Pact and signed a treaty with Stalin in August, 1939, the Hiranuma Cabinet resigned and General Abe became Premier. As the war in China still dragged on Admiral Yonai succeeded General Abe in January, 1940, with a special mandate to bring the China incident. to a speedy close.
The German victories in Europe, however, diverted the attention of the Japanese to the new prizes that seemed now to be within their grasp. Their conception of the New Order in East Asia, which up to now had comprised a modest bloc con- sisting only of China, Manchukuo and Japan, was enlarged to include the vague regions known as the South Seas. East Asia became Greater East Asia, a new phrase " Co-prosperity sphere " was coined, and calculated indiscretions included even Burma and India in the sphere. Heroic measures were felt to be necessary. Admiral Yonai made way for Prince Konoye, all parties were merged in a " new political structure " and Japan took another long stride along the road to a one-party .totali- tarian State on the German model. In March Konoye's. Foreign Secretary, Matsuoka, paid his much-advertised visit to Hitler and Mussolini, and on his way home in April signed a neutrality-pact with Stalin. Two months later Germany attacked Russia, and this second proof of Hitler's treachery caused another great flurry m Tokyo. The result was the dropping of Matsuoka and the invasion of Indo-China, which shows how incalculable are the reactions of this emotional people. Now, three months later, something unpleasant appears to have happened in Washington, and there have been grave developments in Moscow. Again there has been a flurry in Tokyo, and a new Cabinet has come into power under a Premier who is a general and an exponent of the forward school.
The growing ambitions of Japan, her threatening movements now in this direction now in that, may have indirectly helped the Axis Powers, but they have not brought her any nearer achieving her main objective, the destruction of the Chungking Government. After every crisis each new Premier has recog- nised that his main task was to bring the " China incident " to a close, but has been unable to resist the temptation to pursue instead some new and more glittering prize. In part this may be due to the intense weariness that China's stubborn resistance has caused. The fog of war in China is more than usually dense, and it would be unprofitable to attempt to follow the military operations in any detail. All reports, however, indicate that there is great war-weariness on both sides. If the Chinese are unable to drive the Japanese out the Japanese are equally incap- able of destroying China's communications, of occupying more that a fraction of the country or of rendering safe the parts they occupy. One may feel sceptical about'The great victories naively announced from time to time, but it is significant that the Chinese are not too war-weary to stage attacks at places like Ichang, which have long been in Japanese hands.
During the last twelve months Japan has dissipated her mili- tary resources, and in so doing has brought certain economic factors into play which may well prove her ruin. The Japanese have long been conscious that there is only one country that they need fear. If America used her tremendous economic power against Japan no co-prosperity schemes, with self suffi- ciency as the ultimate but distant goal, would avail to save her. America is reluctant to use this weapon, for the American people cling tenaciously to their tradition of non-involvement in the disputes of other nations, but they are slowly beginning to realise that Japan may be as great a menace to American security as Hitler and, if it is true that China cannot defeat Japan without assistance from outside, this is a development of great significance.
The ultimate defeat of Japan, as Chiang Kai-shek has pointed out, presents China with a problem that is only.thirty per cent. military and seventy per cent. economic. The struggle is largely one between competing currencies. Japan must not only defeat and drive away opposing Chinese armies (she never encircles and destroys them), she must also prevent the use of Chinese national currency for financing trade, in order to obtain for herself the foreign exchange resulting from the sale of China's exports. As far back as the spring of 1939 British banks subscribed one half of a £10,000,000 currency-stabilisa- tion fund. The American Government helped by purchasing China's stocks of silver at enhanced prices and by extending various credits---U.S.$2o,000,000 in the spring of 194o, another $25,000,000 in September, and another $100,000,000 in November, 194o. One half of this latter credit was for currency-stabilisation, and was accompanied by a British credit of £5,000,000 for the same purpose. On April 21st of this year the final currency-stabilisation agreement was signed at Washington and London simultaneously, and a joint Chinese- American-British stabilisation committee was set up. An Anglo-American Finance Commission which has just arrived in Chungking is further evidence of the attention that Great Britain and America are bestowing upon this aspect of the problem. It would not be fanciful to trace a direct relation between the menacing developments in Japanese policy and the size and frequency of the credits extended to China. Even more important perhaps is the fact that China is to benefit by the provisions of the Lease-Lend Act. In May it was announced that agreements had been reached for the supply of U.S. $1 cio,000,000 worth of materials to China under this Act. America believes that " orderly processes in international affairs " should be maintained and that " in the Far East there is no problem that could not be peacefully solved through negotiation." She clings to the hope that Japan will one day realise that it is as impossible for her to conquer China as for Hitler to conquer England, and that before it is too late she may return to the camp of the Democracies and to the prin- ciples of the Nine-Power Treaty. Great Britain has kept her policy closely in step with that of America, and until the invasion of Indo-China neither country, in supporting China, has taken action specifically directed against Japan.
The Japanese are constitutionally incapable of appreciating that any action of Japan's can possibly be wrong, and their faculty for holding completely contradictory beliefs, which they successfully keep in watertight compartments, is some- thing quite beyond the 'comprehension of the Western mind. They appear to have thought that the United States Govern- ment might accept their thesis of the Co-prosperity sphere without their discarding any of the principles upon which their policy has hitherto been based. Whether it is the discovery that the freezing of their assets by Britain and America may be followed by sterner measures, or whether it is recent develop- ments in Moscow that are the cause of the crisis in Tokyo, is at the moment of writing uncertain. In either case Japan is again in danger of forgetting that to bring the China incident to a close is her main objective. Should there now be a pause for reflection it may yet be not too late for her to discover that the only way of achieving this object is to call the whole incident off.
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