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There was considerable movement of Japanese newspapermen in
South China during the quarter and a mumber were reported
to have been expelled from Indo-China on various excuses,
The local OSAKA Mainichi Group representative was recently
notified by his head office that "Hong Kong is likely to
lose its value" and it was therefore decided to open a new
agency in Canton. The same group recently distributed
over 100 newly recruited English speaking Japanese reporters
to cities in China. A Japanese propaganda newspaper in
Chinese called the "Kwang Tung Sun (quick) Po" is being
published in Canton, It is discovered that secret reports,
concerning Chinese Military, trade, war materials, movements
of British officials, currency problems, etc., are being
sent from the Hong Kong branch of the Bank of Taiwan to a
Mr. ISHIKAWA somewhere in Tokyo; one report includes
"present conditions in Canton" as found by TONEGI, the
Vice-Consul at Hong Kong, who is South China chief of the
Special Service Political Department and who is apparently
known to his agents in Nanking and Shanghai as Mrs. JOHNSON,
and likewise the Hong Kong Japanese Consulate's Eurasian
agent, KICHARD, is addressed as Miss S.U. YUNG. A new
Japanese economical and political espionage concern is the
FUK TAI Company (FUKU TAI KOSI) whose representatives have
visited Hong Kong. The Company is operated from Formosa
and engaged in investigation work under cover of development
and is believed to be a subsidiary of the Formosa Development
Company, which, according to several reports, expects to
control the development of South China. The FUK TAI is also
apparently a sister society of the KOCHU KOSHI (China
Development) Company, which concern operating from Tokyo,
did the espionage ground work in South China before the
still present hostilities. The KOCHU KOSHI/has two idle
representatives in Hong Kong who are not sure whether the
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