THE New Zealand Herald AND DAILY SOUTHERN CROSS. MONDAY, SEPTEMBER 19, 1921. JAPAN'S OFFER TO CHINA.

New Zealand Herald, Volume LVIII, Issue 17890, 19 September 1921, Page 4

THE New Zealand Herald AND DAILY SOUTHERN CROSS. MONDAY, SEPTEMBER 19, 1921. JAPAN'S OFFER TO CHINA.

It" is a good omen for the Washington Conference that Japan has taken a definite step toward the overdue settlement of the Shantung

question. The facts relating to the present issue between Japan and China date back to 1897, when, using the murder of two German missionaries as a pretext, Germany landed a small force at Kiao-Chao Bay and proceeded to negotiate economic concessions. Early the following year China agreed to all the German demands, including the lease of KiaoChao Bay for 99 years, together with 193 square miles of the province of Shantung and a sphere of influence covering 2750 square miles. In the succeeding 16 years Germany spent £10,000,000 developing Kiao-Chao, while Berlin financiers invested £6,000,000 in the Shantung-Tsinanfu railway and in coalmines along the route. Private investments in land, buildings, and industries are estimated to have brought the German interest to about £25,000,000. When Japan entered the war against Germany in 1914 she addressed a.Note to Berlin demanding the surrender of tbe entire leased territory of Kir.o-* Cnao without condition or compensation, " with a view to the eventual restoration of the same to China." This demand having been recused, the Japanese attacked the forts at Tsingtau, and within a space of about two and a-half months had accomplished their capitulation. It was not an expensive campaign. Japan employed about 30,000 men, and the casualties were officially returned at 1524. The cost of the operation was between £3,000,000 and £4,000,000, the greater part of which was recovered in the booty captured at Tsingtau. The Japanese undertaking to return Kiao-Chao to China has since been conditioned by an .exchange of Notes in which the following four points were accepted.by China:—

1. Opening of the whole of Kiao-Chao as a commercial port. 2. Establishment of a Japanese settlement in the locality to be designated by the Japanese Government. ,3. Establishment, if desired by the Powers, of an international settlement. 4. Arrangements to be made before the return of the territory between the Japanese and Chinese Governments with respect to the other conditions and procedures.

The Treaty of Versailles recognised Japan as the heir to German rights in Shantung, but this provision depended upon the Japanese pledge to restore all territorial rights to China, the Peace Conference accepting the argument that this was preferable to dealing directly with China.

* The settlement now proposed by Japan is based upon the four conditions agreed upon in 1915. In some respects it is more generous. The claim for Japanese and international settlements is abandoned on condition that China opens Kiao-Chao as a trade port, and opens the whole province of Shantung to foreign trade. This removes the objection most frequently expressed by China to the provisional arrangement. It was agreed that Japan's right to establish an exclusive settlement might be stretched, to involve the cession to Japan of all the most important strategic and revenueproducing areas in the bay, including the customs, harbour, wharves, and railway terminus. Japan also had the right under her agreement with China to claim the privileged position hitherto enjoyed by Germany in regard to the Shantung railways and priority for Japanese capital in respect of the construction of a line to connect them with Chefoo or Lungkao. Into these provisions, together with others extending the lease to Japan of Port Arthur and Darien and of the South Manchurian and Antung-Mukden railways, the Chinese read the intention of Japan to control the whole northern railway syßtem. They can scarcely fail to be reassured by Japan's renunciation of her preferential rights in the supply of personnel, capital, and material. Indeed, all that Japan retains for herself of the German concessions is a halfshare of the Kiao-Chao-Tsinanfu railway and the adjoining mines. If this is very liberal compensation for her military effort at Kiao-Chao, it is, at all events, very much less than the Chinese have feared she would claim, and her moderation goes a long way to establish her good faith in the eyes of the world.

It may be hoped that China will not prolong a disagreeable and in some respects dangerous situation by making another demonstration of her amour propre. She refused to sign the Peace Treaty because it did not return the Shantung lease directly to her, and she refused a previous Japanese effort to negotiate on the question. It may be admitted that Japan's methods since the lease fell into her hands have been most uucandid. She modified an unconditional promise to return Kiao-Chao by reservations accepted by China practically under duress and recognised by the Allies in secret treaties, and she has delayed a very long time before taking sieps to redeem her promise. It must further be conceded that Japan has no moral right to an in terest in the Kiao-Chao - Tsinanfu railway or to any concessions made to Germany. But if Japan has not proved disinterested she has at least not proved rapacious. If she has not made a beau R pste she has at least cleared herself of many of Hisuspicions fostered by her am-

biguous diplomacy. That being lm,i China's wisest course- is to negotiate on the basis of (Japan's offer, which, it may be presumed, is susceptible to modification in China's favour: China has no assurance that the Washington Conference would lead to acceptance of her view «of the Shantung question. She is, however, justified in concluding that the approach of the conference has influenced Japan to seek a settlement which may now be negotiated under conditions wholly favourable to China.