[B]
This Document is the Property of His Britannic Majesty's Government.
CHINA TRADE.
CONFIDENTIAL.
[20247]
No. 1.
821
23755
[June 12.] JUL 08
SECTION 1.
Memorandum communicated by Sir C. Dudgeon, June 12, 1908.
THIS letter from Hong Kong appears to me to be of exceptional interest as confirming the advices which we have been receiving (whether through the press or through our own correspondence) as to the gravity of the situation as between China and Japan. The letters of last February and March from our branches at Shanghai and Tien-tsin give a clear expression of opinion as to the hostility of Chinese to alleged Japanese aggression, and now these expressions of north and mid-China are re-echoed from Hong Kong; we may therefore take it that, in the opinion of foreign traders, from north to south China, there is serious danger threatening Chino-Japanese relations.
The "Tatsu Maru" incident affords a most illustrative confirmation of this general expression. In itself a seemingly minor incident, it nevertheless seems to have been seized upon by the Chinese as a convenient "peg upon which to hang an anti-Japanese propaganda of a most far-reaching nature, and, moreover, threatening results which were not originally contemplated. For it would seem that in the movement which has been set on foot not only are Chino-Japanese relations endangered, but, as the Hong Kong letter points out, and we hear the same from other sources, the Japanese sufferers from the boycott are evidently—and not unnaturally—inclined to suspect that their competitors in trade, other than Chinese, are secretly encouraging the boycott in order to benefit themselves at Japan's expense; and it must be admitted that, human nature being what it is, the suspicions may not be without foundation.
Apart, however, from the question of danger to friendly inter-racial relations, there is, as the Hong Kong letter points out, the further great danger that any countenance given to the boycott policy (which has gained great power in recent years) is assuredly assisting in forging a weapon which may be used with most disastrous effect to all commerce; the boycott may be against Japan to-day, but it may be against us (or any one else) to-morrow. The result of the perfection of that weapon must be disaster to all trade, and in the interests of general protection it would seem that common action should be taken to press upon the Chinese Government the danger of this Frankenstein that they are tacitly (or actively) allowing to be created.
In what way the Association can make representation on the subject is a matter for the Committee's consideration. Meantime I am endeavouring to feel my way through unofficial representation at the Foreign Office, and hope to be able to report at our next meeting.
Incidentally we may perhaps derive some satisfaction from the fact, touched upon in the Hong Kong letter, that in view of this racial hatred between the Chinese and Japanese we need not trouble ourselves overmuch about the "yellow peril!"
(Signed) C. J. DUDGEON.
London, June 1, 1908.
Inclosure in No. 1.
Dear Sir,
China Association, Hong Kong, to General Committee.
Hong Kong, May 1, 1908. A MONTH ago, in writing on the subject of the questions arising out of the seizure of the "Tatsu Maru," I indicated the prevailing view that, though the incident itself had been diplomatically closed by the Chinese Government's submission to Japan's demands, the wound thus inflicted upon the newly awakened national pride was likely to remain open for some considerable time.
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