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Government set up by the Japanese. The whole centre of gravity of the real China has shifted to the west, and it is only by direct contact with the people and personalities in the west that any sound judgment can be arrived at as to future policies towards China or any position of influence acquired which will be able to direct Sino-British trade relations into the right channels.
132. If anything could be done in co-ordinating British and American policy and personally I would add Russian as well—in the Far East, this would, I believe, be of great assistance in avoiding any clash between Japan and any one of those countries, resulting from their assistance given to China.
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133. There are certain matters in which Great Britain might assist China without any major clash with Japanese opinion. I have already dealt with the Transport section. There question of the Burma-Yunnan Railway in the are at present in England considerable quantities of materials of various kinds which have been ordered by and manufactured for the Chinese Government, but The release of these which are now being held up owing to war conditions.
should not be regarded merely as a matter of British convenience but rather as an important political question in our Far Eastern policy. The immediate release of these goods would create a very favourable impression in China and would assist in rehabilitating Great Britain in their eyes. An extension of credit facilities on lines parallel to those of America and Russia is also most desirable, as is the granting of some immediate cash advances on the lines suggested in the "Finance" section of this report. In the course of this report I have made a number of suggestions as to other methods whereby assistance could be usefully given to China, and these will be found summarised in the recommendations that appear at the end of the report.
Sinkiang.
134. As there was a great deal of doubt in the minds of many people as to the political situation in Sinkiang, I thought it advisable, and was urged by the British Ambassador, to pay a visit to that province. It is necessary to get a Russian visa before the Chinese Government will give the necessary internal visa, as only transit passengers are allowed in Sinkiang. I obtained the necessary visa from the Russian Ambassador in Chungking after he had consulted with Moscow, and, in fact, I flew right through to Moscow over the new through air route. Owing to the early break in the weather in some parts and the intense cold and bad weather in others, we were much delayed on the return journey and were compelled to go by motor car across the north of Sinkiang from Ili to Urumchi and on to Hami, about 850 miles. This trip by road provided us with an excellent opportunity of seeing the road and the country through which we passed. As we journeyed night and day, we missed seeing the parts through which we passed at night, except for the road itself and the traffic, but this had in itself an advantage, as on some of these roads the main traffic passes at night and consequently may be wholly missed if one only travels by day. I did not meet the Military or Civil Governors of Sinkiang, as the latter had been ill for some time and was still laid up, while the former told me that he was not well enough to meet me. How far his illness was diplomatic" and how far real I am unable to say, though I have a strong suspicion that he could have met me had he wished to do so. I was, however, entertained by his chief executive, Mr. Peng, and some others with whom I had a long talk which enabled me to get a good deal of atmosphere and information.
135. Upon arrival at Urumchi the most complete and thorough search of our luggage was made that I have ever experienced, and throughout our stay both ourselves and Mr. C. H. Hsia, who had accompanied us to give us his assistance and who stayed at Urumchi while we went on to Moscow, were followed, wherever we went, by members of the special police who insisted upon being present-or rather did not go away even when we were talking to other people. There is no doubt that surveillance of foreigners and of Chinese from other provinces is very thorough and complete. On the journey back to Chungking from Urumchi the Governor telegraphed to every station on the road that we were to be entertained and given every facility, &c., and at places where we stopped during normal hours of activity, especially at Tulufan, we were most kindly and generously entertained and were able to get a considerable amount of information from local officials as to local affairs.
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136. Anyone travelling through Sinkiang by the air routes is brought into association very largely with Russians, and at the rest houses and eating place for foreigners the Russians are the only foreigners to be observed. This is the natural result of the establishment of a Sino-Russian air line and of the fact that the Russians are the only resident foreigners in the northern parts of the province. Practically all imported or Western goods come from Russia, which is by far the most accessible market. The Sinkiangese can buy these goods upon extremely favourable terms from Russia. Their cheapness arises largely from the incidence of the exchange rates. The Sinkiang Government operates
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on the official rate of exchange laid down by the Central Government for Chinese to American dollars (3-5:1). This rate is translated into roubles at the official Russian rate for roubles to American dollars. Thus, when we were in Urumchi, a box of twenty-five best quality Russian cigarettes was selling for 20 Central Government cents, equivalent at the commercial rate of exchange prevalent in Chungking to less than 1d. Food at the Russian eating-house, which we used exclusively, as the Chinese restaurants were not clean or safe from a health point of view, was also extremely cheap, the average cost of our meals working out at 1 Chinese dollar per meal per person. This makes the cost of living very low for a visiting foreigner who has acquired Chinese dollars outside Sinkiang. To give one other example we purchased excellent goat skin top boots for 10 Chinese dollars a pair, or about 3s. 6d. The cost of living for the native population is rather higher than in other parts of Western China, but not greatly so, and this is more than set-off by higher rates of wages. The import trade from Russia, and possibly the export trade to Russia as well, is dealt with through a Russian- operated Sinkiang Trading Corporation. I was unable to ascertain exactly how the control of this corporation was shared, if at all, with the Sinkiangese.
137. The Government, from our observation and from all accounts and documents we were able to get hold of, including the Governor's own speeches to his political advisory council, is extremely autocratic. The Governor's position is in some ways not unlike that of the Generalissimo in China, but I should imagine that he is very little influenced by any of his lieutenants. The Governor is undoubtedly much feared and nothing can be done even in comparatively small matters without his express sanction. For instance, such simple matters as the examination of our luggage on leaving and permission to take photographs had to be referred to him personally before we could ascertain whether we could get exemption from the regulations. In fact we never obtained permission to take photographs, though it was never refused! His policy is, however, on the whole, progressive and enlightened, being influenced to a large extent by the neigh- bouring developments in Russia. He is nervous and anxious of his own position as he is determined to maintain his power, and as with all autocrats, this attitude creates the necessity for secret police, convictions without trial and shootings. It is, however, fair to say that, so far as the latter incident is concerned, the only actual instances of which we obtained information were the shootings of magistrates who had been guilty of corruption. Three of these had been shot within the last year, and this was said to have had a very good influence in cleaning up the Administration.
138. The Governor is a follower of neither the Kuomintang nor the Communists in his policy. This is based upon the fact, and fact it is, that the geographical and ethnological situation of Sinkiang is something rather special, and that therefore there is need for a special policy for the province. This policy is expressed in Six Great Principles." namely (1) anti-imperialism; (2) good neighbourliness with the U.S.S.R.; (3) equal treatment, civil and religious, for all races and creeds; (4) preservation of civil peace; (5) honesty in administration; (6) building up the standards and developing the economic life of the province. In addition to these six principles there are two funamental attitudes which are important. In every important speech or declaration made by the Governor he reiterates, with the applause of the people, that "Sinkiang will always remain as one of the Chinese provinces and will be Chinese territory.' This same attitude is well illustrated by the slogan that can be seen printed or painted up in many places: "There are two great men in China, the Generalissimo and our Governor." Similarly, as in all Russian places one sees the enlarged photographs of Stalin, Molotov and others, so in Sinkiangese buildings one sees the photograph of the Governor and perhaps the Generalissimo, but none of any Russian notabilities. Associated with this. quite genuine, determination to remain a part
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