[This Document is the Property of His Britannic Majesty's Government.]

6.0

[B]

AFFAIRS OF CHINA.

19697

REC?

CONFIDENTIAL.

REGP 16 JUN 11

[May 22.]

SECTION 7.

[19358]

No. 1.

Sir G. Buchanan to Sir Edward Grey.-(Received May 22.)

(No. 136) Sir,

St. Petersburgh, May 17, 1911. IN consequence of the somewhat alarming reports circulated by the press with regard to the state of affairs in China, the following communiqué has been published in the " Official Messenger'

"With reference to the information published in several newspapers to the effect that pourparlers are taking place between the Russian and Japanese Governments for the purpose of concerting a more active and combined policy in China, the Informa- tion Bureau is authorised to declare that these rumours are entirely fictitious. Russian policy in the Far East seeks the maintenance of the status quo, and one of its main tasks is the preservation of friendly relations with China.”

The United States Ambassador tells me that he recently questioned M. Nératow on the subject of the supposed Russo-Japanese negotiations, and that his Excellency had replied that it was but natural that the two Governments should from time to time discuss matters in which they are mutually interested in China, and that such an exchange of views had taken place with regard to the recent loan of 10,000,0001. The Russian Government, M. Nératow had said, were somewhat preoccupied as to the uses to which might be put that portion of the loan which was to be devoted to the promotion of "industrial enterprises in Manchuria," "Industrial enterprises" was an elastic expression, which might be made to cover the construction of arsenals and powder factories, and the Russian Government therefore desired to assure itself that there was nothing in the terms of the loan contract to which they could take legitimate exception.

Mr. Rockhill seems rather to suspect that both the Russian and the Japanese Governments are seeking for a pretext on which to base a formal protest against the loan.

I have, &c.

GEORGE W. BUCHANAN.

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