THE New Zealand Herald AND DAILY SOUTHERN CROSS. TUESDAY, JANUARY 26, 1926. RUSSIA AND CHINA.

New Zealand Herald, Volume LXIII, Issue 19235, 26 January 1926, Page 8

THE New Zealand Herald AND DAILY SOUTHERN CROSS. TUESDAY, JANUARY 26, 1926. RUSSIA AND CHINA.

Rumours of war threatening between Russia and China recall that there is a common boundary between Soviet territory and country nominally under the control of China. Manchuria and Siberia lie side by side. Where there are frontiers, there friction is a possibility always ready to emerge. At the same time the position is complicated. Though -Manchuria is officially Chinese territory, the Peking Government has little say in what happens within its borders. Chang Tso-lin, who acknowledges no responsibility to Peking, controls the province. If, as is reported, Russia contemplates a declaration of war against China for something which has happened in .Manchuria, the ostensible Government of the country cannot be held accountable, for it can, and frequently has, repudiated the actions of Chang. The attack would, in effect, be against an army counted rebel by Peking. Yet China could not afford to be indifferent if Soviet forces went campaigning in Manchuria. Neither could Japan. The other Powers would certainly be aroused if there were a clash, for China is admittedly a diplomatic and international danger zone. To find events shaping this way is surprising, for much of the trouble lately experienced in China has been attributed to the very friendly relations existing nvith the Soviet Government. Russia has assiduously cultivated an air of magnanimity, has utilised the footing go gained to stir' up feeling against other nations, and has shown a disposition to make concessions, which, costing little to Russia, have seemed great. For instance, when an agreement was made in May, 1924, the Soviet Government waived extraterritorial rights in the Treaty Ports. Practically nothing was involved, but since the diplomatic immunity foreigners have enjoyed has been resented by the Chinese, the gesture was a shrewd one. This transaction occurred simultaneously with an agreement concerning the Chinese Eastern Railway, which figures in the dispute now described in sensational terms.

The lino of railway which runs through Northern Manchuria to Vladivostok has played a great part in s?ar Eastern policy. It dates back to the days when the Russia of the Tsars was constructing the'line which crosses Siberia to its Asiaticshore. When work had proceeded beyond Lake Baikal, it was realised that a tremendous detour would be necessary to skirt the border of Manchuria, and then strike south to Vladivostok. Russia, by a great stroke of policy, obtained a concession from China, ran the line through Manchuria, linked up both Vladivostok and Port Arthur, and thus secured railway connection with a warm-water port. The concession was given in 1896, the line opened to traffic in 1902. After the RussoJapanese war Japan gained possession of the southern branch running from Vladivostok to Dalny and Port Arthur, but the main Chinese Eastern Railway was retained by Russia. It was not of such strategic importance as it had been, for Japan was firmly established in South Manchuria, and thus coulcl threaten its flank in the event of trouble. At the same time the opening of the railway system had done so much to develop Manchuria, which is a land of tremendous potentialities, that the economic value of the line was illimitable,, Though built in the first instance as a strategic railway, it was not a, Government line. It had been financed by the Russo-Chinese Bank, with a Government guarantee for the necessary bond issue. Thus the Russian Government exercised wide powers of control over it. Concessions given to its controllers over land, forests and mineral resources along its route made it a commercial undertaking of the first magnitude. It brought little direct- return to the investor, but through its instrumentality there was a wonderful forward movo in Manchuria. This remained the situation until 1920 when, Russia being in chaos, China entered into possession of the property, and undertook to run it wholly, disregarding the fact that it had been built by private capital. The Russo-Chinese-—or RussoAsiatic —Bank immediately entered a claim, and received from the Chinese Government an acknowledgment of its rights. ■' Up to the middle of 1924, the position remained as created in 1920, the railway being operated in terms of the agreement between China and the Russo-Asiatic Bank. At the end of May, 1924, China and Russia concluded a number of agreements, including a pact covering the Chinese Eastern Railway. The position of 1920 was reversed. China bargained with the Soviet Government as if the last-named were the owner of the line. An agreement for its operation was made, and China was :-iven the option of purchasing it oo terras not announced. This move seemed full of provocative possibilities, save that China's action was < ntirely futile. By this time Chang Tso-jin was master of Northern Manchuria, and took no account of what Peking did. A Uifr months later, however, Chang himself came to an understanding with the Soviet, accepting terms almost identical with those formulated by China for the railway. Though Peking protested, the line has been so operated, with a Russian manager. Now hang and the Soviet Government have fallen out, so that the prospect is threatening. The position and attitude of Japan is of itself enough to cause anxiety. The Japanese

have heavy financial commitments in Manchuria, and a keen eye to strategic values. Hence the sensitiveness to anything affecting • the Chinese Eastern Railway. France also is an interested party. Much of the capital of the Russo-Asiatic Bank came from- France. The French Government has asserted the rights of the bondholders before this. Therefore, though it may be difficult to imagine just how China and Russia could go to wai, thcic are more than enough possibilities of trouble should Soviet troops cross the Manchurian border, especially on any pretext affecting the Chinese Eastern Railway.