Enclosure No. 1.

SECRET.

THE FAR EAST POLITICAL COUNCIL BRANCH.

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The following instructions are given to all Councils

abroad and the Regional Political Councils (G.P.U.),

and the Regional Military Councils (Razvedovir): -

-

As the political situation in China is still in

a state of chaos, the Powers have not much faith

in the Nanking Government, although they do not desire to suspend negotiations on new treaties

with the Chinese Authorities.

To put China under foreign control, economically

and politically, is the real object of the Powers.

The most powerful and interested countries in East Asia are the United States and Japan. The influence of France is comparatively small, but she has, according to private investigations, concluded a compact with Japan whereby the France will support Japan's diplomatic policy, and the latter in turn has to undertake the responsibility of protecting the former's settlements in China.

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Great Britain feels much anxiety conceming her Colonial possessions, and she has therefore temporarily adopted a "wait-and-see" policy towards China, and will, in the event of an American-Japanese war, declare strict neutrality with a view to maintaining her advantageous

position after the struggle.

Germany's position in China is now equal to that

before the Great War, and she will soon become a strong competitor to the Allies.

Great Britain is much in need of a market for

her goods.

While the cost of living is

steadily

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