CO129-564-11 Road communications with Canton. Includes 1 photograph depicting- Bridge over Shum Chun River- China. Dated... 20-8-1937 - 18-1-1938 — Page 45

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If German attitude is not modified and if at conclusion of hostilities China does not remain entirely at the mercy of Japan it seems probable that Germany will not only be granted economic concessions but that she will also be asked to continue re-

organisation of Chinese army.

A strong German strain in China taking a wide view would probably be advantageous to British interests as a check on Japan but it would in my opinion be a blow to our prestige if we lost our influence with Chinese navy. During the last year both German Embassy and German advisers have evinced some interest in position with regard to Captain Horse's successor as adviser to Chinese navy and a remark let slip recently by a German adviser to a member of my staff to the effect that after conclusion of hostilities China would do well to build up a large fleet of German submarines has made me suspect that Germans may be con-

There are already two templating replacing us in this sphere. German naval advisers at Kiangyin barrier. I am accordingly again taking up with Ministry of larine question of appointment of a British naval adviser to Chinese Central Government. (Please see telegraphic correspondence ending with Peking telegram 319 to you).

Addressed to Foreign Office lo. 557 October 11th; repeated to Peking, General Officer Commanding, Commander-in-Chief.