CHIANG KAI-SHEK'S DIFFICULTIES.

Hawke's Bay Herald-Tribune, Volume 81, Issue 49, 20 November 1937, Page 4

CHIANG KAI-SHEK'S DIFFICULTIES.

{Though it may scarcely be said that there is a lull in the Sino-JSjpanese war storm, still the complete reduction of Shanghai into Japanese control marks a distinct stage in Japan's military operations. The Chinese forces have on all sides been forced fairly well back from the city and, though we are told that reinforcements have been brought up and some kind of rally effected, it may confidently he taken that there is verv little ehance of any successful attempt being made to recover it. So far as the Shanghai area is coneerned the most that may be expeeted is that the Chinese may fight a stnbborn retreat, which they will probably be forced to continue until snch time as the Japanese fcel that on this front they have got as far from their bases as safety to their communieations will permit. In the course of the withdrawal it will no doubt be part of Japan's plan to inflict as great punishment as possible npon ChinaVarmed forces and as much terrorisation as possible upon the non-combatant population. It will then no doubt be Japan's policy to devote even more concentrated attention than hitherto to gaining complete control of the three northern Chinese provinces of Hopei, Shansi and Shantung which, along with Chahar and Suiyuan, already pretty well reduced into possession, they purpose erecting into a so-called "independent" State on much the same lines as they have pnrsned in Manchuria. That is, indeed, and from the first has been, their main objective, which they might well by this time have attained but for the quite unexpectedly stiff resistance which the Chinese have put up at Shanghai. Even while a very considerable section of her fighting forces has been thus, much longer than was thonght likely, been diverted to Shanghai, Jap.an has simultaneously gone a long way towards securing a full hold on both Hopei and Shansi and, so far as the cable news can be taken as a guide, she would also appear to have got possesion of the mountain passes that lead-down to the central plain of Shantung. Of this, the largest and richest province of the five, a writer in a re'cent number of the Manchester Guardian says: "Here at present the war is being fought not with gnns and aeroplanes, but with bribes, threats and promises." The Governor of Shantung, General Han Fu-chu, we are told, is a war-lord of the old type, with a taste, in.his later years, for peace and comfort. Though he has a considerable and wellequipped army at his command, he had not then, nor does he seem since to have, made any move with it, despite the fact that the Japanese forces are conducting intensely active hostilities right up to the northern border of his province. In' return^ it is said, the Japanese have not bombed his cities nor blockaded his port of Tsingtao. Instead, they had sent on a visit to hira, a missioner notorious for his successful negotiations with prominent Chinese who were "open to reason." At the same time, should General Han decide to fight, Japan has a detachment of her navy ready to blockade and shell the coast and probably to land an army in his rear, another "inducement" for hira to fall to temptation. This revelation discloses aiiotiier diffieulty with which General Chiang Kai-shek has to contend, in that, tliough China may truly be said to be more united than ever before, there are still those upon whom he can put but little dependence for loyal support. An inst'ance of this was seen when in Shanghai itself there was a prominent citizen who was quite ready to accept the mayoralty under Japanese direction. China 's main trouble is, of course, the problem of providing her armies with the equipment and munitions that are essential to any successful resistance ot the invaders. Her artillery is no match for the Japanese, and though she may have had a number of arinouries in which small arms and ammunition for them are manufactured, some of the largest are in localities that have already fallen or are likely shortly to fall under Japanese control. Thus she is almost entirely dependent upon snpplies from abroad and, even if foreign countries are ready to furnish them, there cannot but be very great obstacles in the way of getting them to the scenes of action while Japanese air-bombers can practicaltv dominate all lines of internal transport. This has to be said even in regard to Russia, excepting perhaps with respect to aircmft independent of gronnd transport. The immediate outlook for China is thus auything but promising, whatever may be the ultimate ontcome. UNEMPLOYMENT FUNDS An. impressive contrask is provided by tho handling oi unemployment funds in Great Britain and New Zealand. A "bigger and bigger surplus" is reported to be piling up in the British funds. At the end of August the surplus amounted to £50,000,000 and was increasing at the rate of £18,000,000 a year, or £1,500,000 a month. The large excess over needs is due to the riBe in employnxent to record figures and to the reduction of unemployment by one-hali from the peak. Buoyant finances have enabled a substantial increase in bonefits under two importaut heads to Cost £2,250,000 a year, a decrease in contributions by employera and workers, the reduction of the huge debt agiainst the fund largely incurred by the Labour Government of 1929-31, and the building up of a roserve in the present good years to tide the fund over the lean years with, if poSsible, no. reduction of benefits. In New Zealand the same factors have favoured the building up of the loaal fund, although unemployment has not decreased at as high a rate under the Labour Government as it has in Britain under the National Government. Even so, the New Zealand position has improved considerably, Here, however, the grflater financial ease has been used in one way only — to increase benefits. Contributions have not been reduced nor have reserves been put by against a rainy day. The opposite policy has been followcd, The Labour Government found a credit balance and one of its first aets was to procoed to dissipate it. In spite of the distribution, tho fund commenced last financial year with. a surplus oi £400,000. As in Britain, so here, the revenue in the succeeding 12 months ended Miarch 31 last fcontinued buoyant and the calls on the fund were fewer. Yet the expenditure in New Zealand actuall^ exceoded the revenue by £150,000 and the small surplus was. reduced by that imouatt 7 " * *