CO129-498-2 Canton boycott- opening of negotiations with the Canton Government 2-11-1925 - 23-12-1925 — Page 5

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made it his business to prevent the Cantonese Red

Army from crossing the Hainan Strait and occupying Hoihau, which is one of the sources of this Colony's

meat supply. He has, however, now left for Shanghai,

and has withdrawn all his cruisers from these waters,

probably because he has neither money to pay his

crews nor ammunition for his guns, and I doubt whether he will be able to give this Colony any

further help for some time to come.

2.

The position in and around Peking

appears to be such that the so-called "Chief

Executive" is wholly without power; and no matter what form of Government may be set up at Peking

as a result of the conflicts now in progress between the various War Lords in the North, it seems certain

that the present Canton Government will refuse to recognise its authority.

3.

In Shanghai and the provinces at the mouth of the Yang-tse Marshal Sun Chuan-fang appears at present to be the dominant power, and he is, I am

told, at the head of a well-drilled and well-equipped

army of about 60,000 men. I have been informed that

Marshal Sun is a native of Fukien Province; that

he has been much incensed by the advance of the

Cantonese Red Army under General Cheung Kai-shek

north of Swatow to the frontier of the Fukien

province: that he is a determined enemy of the

Russian Bolshevik in-fluence in China; that he, like

Admiral Li, regards the present de facto Government

of Canton as a rebel Government, and that he has

expressed his intention of marching southward

through Fukien into Kuang-tung in order to overthrow

the present Cantonese Soviet administration. I am

endeavouring to

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