FUTURE OF SHANGHAI

Hawke's Bay Herald-Tribune, Volume 81, Issue 61, 4 December 1937, Page 4

FUTURE OF SHANGHAI

There can be nn manner of doubt that, froin a military point of view, the Japanese have now secured coniplete control of Shanghai and its iminediate neighbourhood. It has, however, been in men, material and money a very costly conquest. This may help ns to understand why the Japanese military anthorities have ordered a triumphal mareh through the city that will take a route through the Foreign Settlement. This no doubt is meant as a demonstration to the Japanese people at home of the thorough success tliat has attended this very important phase of the campaign in China and so gain popular support for the continuation of activities on other fronts. That, of course, does not preclude agreement with the loeal foreign opinion that the whole thing is "a piece of eriminal stupidity" that might easily have led to very grave consequences, especially if there is any foundation for the report that the French wonld resist any attempt to continue the mareh through their special "coneession." Hoping, however, that this rather barbarie display of power has passed off without any serious incident, what is exercising most minds just now is as to what may be the future destiny of this great Chinese city, the main centre of the country 's industrial and commercial life. In that are involved the interests of many people of many nations. It is said that foreign capital invested in Shanghai runs into hundreds of millions sterling, in which Great Britain (£150, 0o0,000) is by much the biggest holder, Japan (£45,o00,000) probably coming next, followed by the United States (£26,000,000)'. The present situation has been well set out by Mr. H. G. ."Woodhaad, the Far Eastern' correspondent of the Sydney Herald, who reminds us that, though Shanghai is on Chinese soil, China 's sovereignty over the areas known as the Foreign Settlement and the French Concession is serionsly restricted by international engagements which have resulted in the development of important interests — administrative as well as financial, industrial and commercial. The foreign municipalities are not under Chinese jurisdiction, policing and other functions are in the hands of conncils in which the foreign elemcnt predominates, and for long years past both authorities have denied access to their areas by armed Chinese forces. For at; least the last ten years British, American, French and Japanese garrisons have been maintained, their original purpose being protection against Chinese armed incursions. So much has been happening elsewhere in the world during the interval, that we are apt almost to forget that only five years ago, Japan set abont attempting what she has now accomplished, the reduction of Shanghai into her virtual possession. Time and circumstances were not then as favourable as now to the carrying ont of this purpose, and under pressure from other interested governments hostilities were brouglit to an end in May 1932 by an agreement to which British, American, French and Italian envoys subscribed as ~ representing "friendly Powers assisting in the negotiations. " There was then a general understanding, though not reduced to writing, that a " demilitari&ed zone" would be established around the foreign areas. It would appear that of the signatories to the peace agreement Japan was the most definitely insistent on this point, and relied on an assurance by the others that, as soon as the Japanese forces were withdrawn, it would be taken up at a round table confcrence called to diseuss the future of Shanghai. Unhappily none of the Powers would seem to have moved to see that this intention was carried out and the proposed conference which might possibly have averted at least some of the present trouble was never held. As matters now stand, and failing military action by foreign Powers, it would appear to lie very much in Japan 's hands to dietate the terms upon which the interests of foreign nations in Shanghai will in future be recognised. For the rnoment she is riding something of a high horse, but it is more than likely that, when eooler counsels prevail, slie will realise that she has already got as much in hand as she can manage and also that, if in no otherrespect, her own economie future ealls for the restoration of friendly relations with the other trading nations of the world. It. may thus be reasonably expeeted that she will beprepared to consider favourably proposals that may be advanced for tlie re-establishment of Shanghai under conditions that will give assurance of safety for the very many scores of millions of new capital that will be required for that purpose. In default of this, then there is some possibility of Shanghai, big and modern as it is, being added to the list of the world 's deserted and ruined cities.