893.00/11974: Telegram
The Minister in China (Johnson) to the Secretary of State
[Received 11:10 p.m.]
557. 1. The signing of the Shanghai agreement has, on the whole, strengthened the position of Wang Ching-wei. The decision of Japan to make an almost immediate withdrawal of its forces from the Shanghai area has done much to take the teeth from the Cantonese criticism of that agreement as an unpatriotic surrender of national rights; the result has been to disconcert the Cantonese and to cause them to hesitate in their choice as to their next move vis-à-vis Nanking. Reports from Kwangtung and Kwangsi state their confusion and betray no definite line of action.
2. The inclination at Nanking under the continuing influence of Wang Ching-wei apparently lies in the direction of giving a very free reign to the provinces and the abandonment, at least for the time being, of any attempt to centralize authority by force. Han Fu-chu has been appointed to restore the national revenues of Shantung; and an emissary of Nanking is now visiting Peiping and Taiyüanfu doubtless on a mission of promoting generally a good understanding with the leaders in North China. Whether or not appearance of such a [Page 30] policy is the result of conviction or is necessitated by the present emergencies in China’s foreign relations is a matter for speculation.
3. Reports of Sino-Japanese incidents at Shanhaikuan have been greatly exaggerated. It would seem highly unlikely that Japan, simultaneously with its withdrawal from Shanghai, would provoke disturbances whereby whatever merit may have been acquired through the Shanghai policy would be speedily dissipated by an adventure along similar lines in North China.
4. It should not be forgotten that the activities of communist bandits continue to give grave concern to the constituted Chinese authorities in many important areas.