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(4) Shanghai.
To protect the Concessions at Shanghai by military moans against Nationalist troops that might be brought against it in the near
future, a force of at least one division and one squadron of aeroplanes would be necessary, and would have to be despatched without delay. This should be an international force, with a preponderance of Japanese, and commanded by a Japanese Officer, in view of the fact that Japan alone can provide large forces at short notice. In the present circumstances we must in fact rely primarily on Japan to protect our interests in Shanghai, Oring to the magnitude of British interests, British participation on the scale of a mixed Erigade, with a proportion of naval aircraft, although it may be late, is essential. These forces should be additional to those required to control the population.
Such steps for the protection of Shanghai might involve war with China, the consequences of which cannot be foreseen.
(5) Military Reserve in the Far East.
The present situation clearly shows the necessity for a strategic military reserve in the Far East, which we think should be at Singapore.
(6) Economic Pressure.
It is recommended that the Advisory Committee on Trading and Blockade should be assembled at once to report on all the possibilities of economic pressure on the Nationalist Government of China whether by international action or in the last resort by the British alone,
(7) General,
The importance of securing international co-operation in any action against China whether economic or military, cannot be too strongly emphasised.
2, Whitehall Gardens, S.W.1.
11th January, 1927.
18.
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