CRISIS IN CHINA

Evening Star, Issue 19792, 16 February 1928, Page 9

CRISIS IN CHINA

PROBLEM OF MANCHURIA DEPRECIATED STOCK The Nationalists, or Kuomintang, are steadily drifting towards destruction (says the Shanghai correspondent of the Sydney ‘ Morning Herald ’),. Mr Wang Ching-wei, who was formerly Dr Sun Yat-sen’s favorite disciple, is evidently trying to back intq the limelight. He has succeeded in causing a breach between the Nanking and the Canton cliques—these terms must not bo taken too literally; they are used for the sake of convenience to differentiate between the Kwangsi generals who control the Nanking “ Government ” and Wang Ching-wei and his adherents. While ho was surreptitiously causing this breach he was ostensibly _ endeavoring to bring the antagonistic elements of the Kuomintang together. It might be remarked that Machiavellian methods have an unholy attraction for the Chinese—if they can get anywhere, either directly or by a tortuous route, they invariably choose the latter. The result of Wang’s manoeuvres has been to put the Red element in control at Canton. A denunciation of the military men responsible for the Canton coup has been issued by the Nanking authorities, but no reference was made to Mr Wang. Conferences are being held hero by representatives of the three main divisions into which the Kuomintang is split. Whether they will succeed in bringing about a compromise and so prevent an open breach between Canton and Nanking is doubtful. The Nationalist military leaders are attending the conferences, and they are extremely jealous of each other. Quite recently in Anhui a serious reverse was met with by the Nationalists owing to one general ordering his army to withdraw for some unexplained reason, leaving another army that it was supposed to be supporting to be annihilated. Obviously if this sort of thing continues the Nationalists will again be driven south of the Yangtse. The general who is supposed _to be commander-in-chief of the Nationalist forces is General Ho Ying-ching, but General Pei Ching-hsi, who commands the Ninth Army (and who is in control at Shanghai), considers himself as above Ho’s orders. The latter is a strong supporter of Wang Ching-wei, and Rei is equally as strongly opposed to him. Another practically independent general is Li Ghung-yen, who is understood to have an agreement with Pei for mutual support. As all the men named are at present in Shanghai attending the conferences the position is decidedly interesting. A RAILWAY LOAN.

Great interest lias been excited by the report that the Morgan group of capitalists in America is about to issue a loan on behalf of the South Manchurian Railway Company for G. dollars 40,000,000. The railway is, of course, Japanese owned, and is magnificently managed. The operations of this concern have led to the_ distribution of millions of dollars in South Manchuria, and the Chinese have been the principal gainers. _ Every year hundreds of Chinese emigrate from wartorn China proper and seek the security that they find in Manchuria. That security must in fairness be attributed partly to Chang Tsodin’s firm rule, but undoubtedly it is for the greater part due to the S.M.R. In such circumstances it might be expected that Chang Tso-lin’s party, at all events, would welcome the loan, but, on the contrary, Chang’s right-hand man has denounced it as “ American aid to Japanese Imperialism.” As a matter of fact, the railway has, in the past, raised .certain loans on the London market at a time when there was a Government in Chinn which was recognised by the Powers. The Chinese Government then did not make' any protest against those loans. As late as 1923 the South Manchurian Railway raised a 5 per cent, loan in London. That the Nationalists should protest was, of course, to bo expected. They protest whenever opportunity offers, and the Nanking "Minister of Foreign Affairs,” Dr C. C. W’u, avidly seized the chance to work off platitudes about "Imperialism.” It is understood that Dr Wu would be agreeable to America lending the South Manchuria Railway money, provided the charitable New York bankers would “lend” the Nationalist Government, whatever or wherever that may be, _ also some money. When Dr Wu discusses the question of a Joan with the American bankers he would, no doubt, show how high China’s credit is in the international money market. Perhaps he could explain the difference shown in quotations for Chinese and South Manchurian Railway securities. On November 7 business was done on the London Stock Exchange in 6 per cent. South Manchuria Railway bonds at £92 10s; in 5 per cent, Tientsin-Pukow Railway bonds, £24, and in Shanghai-Hangchow-Ningpo Railway 5 per cent, bonds at £37 Ills; while Hukuang Railway 5 per cent, bonds of London, Paris, and New York issues were sold at £27. THE LOCAL SITUATION. At the present time the labor position has become more serious. No trams are running. For'a while the tramway company, after their employees struck about a week ago, managed to run a skeleton service, but gunmen have been at work, and after one of the tram inspectors had been shot the loyal employees became fearful and refused to go on duty. They can hardly be blamed. The gunmen have been active in many directions, and there have been what might almost be- described as pitched , battles between the police and some of these miscreants. Both foreign and Chinese policemen have been killed or wounded, and about seven of the gunmen have been accounted for. Oaio British constable shot three of them dead one day' last week. These, gunmen are said to receive inspiration, if not actual material assistance, from the Soviet consulate. There is an increasing demand that this centre of crime should be cleared out of the settlement. It is beyond question that the consulate has been responsible tor much of the trouble that this city has endured since March last. Kidnappers, as reported previously. have been very active, and as a consequence White Russian membars of the Volunteer Corps, accompanied by Chinese policemen. It has become quite a usual sight to see a Chinese policeman, with pistol ready, halt a motor car and search it and its occupants, while a Russian sentry, with bayonet fixed, stands by. In spite of these urecautions, kidnapping is still going on. Early last month the Nationalists claimed to have captured JHsnchowfu, a city of great strategic importance, and vast quantities of ammunition. Reports of Nationalist victories have always to be received with reserve. As a matter of fact, foreign messages from Tsinanfu received on December 8 state that the Shantung armies, personally commanded by Marsha! Chang Chungcliaiig, are still holding Hsn-chowfu, despite the repeated attacks of the Nationalist troops and those of the Christian general. A critical situation was created there recently, the messages add, when all Marshal Sun Chuan-fang’s forces and the Chihli troops were withdrawn and sent to Lincheng and' Tsiniiig respectively for the purpose of meeting the Kuorninchun attacks on these places. With only the Shantung forces holding Hsuchowfu, the Nationalist armies almost captured the city, but their attacks were driven off after desperate fighting.