[This Document is the Property of His Britannic Majesty's Government, and should be returned

to the Foreign Office if not required for official use.

10

Decypher.

No. 745.

From CHINA.

Hr, Hove, (Shanghai).

17th December, 1987.

D.

(ireless)

17th December, 1957.

R.

5 p.m.

17th December, 1957.

0:0:0:0:0

My telegram No. 736.

Following is result of enquiries which Calder-Marshal has nade of Okazaki as foreshadowed in last paragraph of my telegran under reference, (begins):

hile the Japanese are establishing Provisional doverment

in the Korth including Hopei, parts of Chahar, and Shansi and

are preparing to recognise it as the Provisional Republic of China (the hole of China) they would if peace was arranged

with Central Government establish it as a semi-autonomous

Goverment only. Should peace terms not be arranged Japan would support provisional Government and aid it în securing

control of the rest of China first consolidating its position from Great Wall to Wingpo controlling Tientsin Pukow railway

and thereafter pressing south.

Should peace terms be agreed Japan would also maintain

with her own forces a zone of 30 or 40 miles round Shanghai no international guaranteed zone would be acceptable but

International Settlement would not be interfered with.

-

Facilities required by Japanese would if an agreement was made apply to North China only (the occupied area) and would

mean that Japan would have the right to undertake all develop-

ment required if she wished to do so and that constructive

work would be referred to her first of all. Others might

participate if Japanese wanted [? discussion] of this area

[? gp. ontd.]

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