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little. If she was intending to make Canton a base of operations to be directed against Indo-China, the Malay Peninsula and the Dutch East Indies, she has as yet

In Java been able to do little to forward her plans. alone have Communists been at all active in working up an agitation among the masses, but the Dutch authorities have now grasped the nettle firmly and the agitation will probably subside.

In the event of further trouble in China it is probable that there will be repercussions overseas, A considerable Chinese population-native-born and immigrant inhabits Indo-China, Siam, the Malay Peninsula and the Dutch East Indies and these Chinese elements are bound together by the Kuo Min Tang, the Chinese nationalist organisation which, though swinging towards extremism, is still more nationalistic than Communistic or pro-Russian. The idea that a Chinaman

is a Chinaman first and foremost, wherever he may happen to be born, is slowly spreading and constitutes a direct, though probably distant, danger to European interests in the equatorial belt.

3. On Indian sedition at Canton I havereported separately. The Sikhs and Muhammadans who allied themselves to the strikers were either out of employment

Their position or mostly in the employ of Chinamen.

in Canton was rendered difficult by the extreme anti- British feeling prevailing there, and it is not unnatural that they shouldhave allowed themselves to be drawn into the general agitation.

While the leaders

joined the movement because they were actively disloyal, many of those who subscribed their names must have done so because it was the easiest course to follow and the

only alternative to intimidation and possible loss of

employment

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