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

Printed for the Committee of Imperial Defence. April 1927.

22.3

SECRET.

794-B.

(Also Papers Nos. C.O.S. 83,

and C.P. 131 (27).)

COMMITTEE OF IMPERIAL DEFENCE.

Copy No. 40

THE SITUATION IN CHINA, APRIL 25, 1927. POSSIBLE SANCTIONS.

Third Report by the Chiefs of Staff.

IN accordance with our general instruction from the Cabinet to keep the question of sanctions constantly under review as the situation changes from time to time, we submit herewith a Third Report on the subject.

2.

The situation, according to information up to 10 A.M. this day, the 25th April, may be summed up as follows:-

The situation is generally quiet at Shanghai, and also at Tientsin and Canton. Hankow is more or less in a state of tension occasioned, on the one hand, by the Chinese apprehension of possible reprisals now that "Vindictive" and "Despatch" have arrived, and, on the other hand, by the split between Extremists-Communists and Moderates. In the Lower Yangtse British men-of-war have been fired upon from the South bank, and have returned the fire.

Civil War.

The Northerners have as yet made no effort to cross the Yangtse, though they state their intention of occupying Chinkiang and Nanking. There is renewed activity on the Peking-Hankow Railway, but the main Northern body is still 200 miles North of Hankow.

Dissension among the Nationalists.

The allegiance of the Southern military forces is stated to be approximately as follows:

Moderates" (Chiang Kai Shek) "Extremists" (Hankow Government)

Doubtful

250,000

200,000

150,000

Although the "Extremists" are reported to be moving down-stream from Hankow against the "Moderates," Chiang is believed to be gaining influence even at Hankow, where the "Extremists" General (Tang Sheng Chek) is now reported to have resigned his position.

The Hankow Government are said to have arrested Feng Yu Hsiang's repre- sentative in Hankow, on the ground that Feng is not loyal to the Communist faction.

3. Our attention has been called to a Note by the Secretary of State for Foreign Affairs on our Second Report (Paper C.P.-130 (27)). We observe that the Secretary of State criticises our proposal that the Naval Commander-in-Chief should be empowered not only to reply to fire directed against His Majesty's Ships, but, whenever fire is directed against any ship flying the British Flag, to take retaliatory action against the offender, and, if necessary, to land parties for the purpose of com- pleting the destruction of forts or guns guilty of such action.

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