FO371-23515 — Page 166

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2.

305

Manchoukuo Government on the recognition question has been progressively evident during the last to or three months and has been fully commented on by His Majesty's Consul-General at Mukden. The period of waiting to see whether the lowers

would attempt to strangle the development of the new state

hae, according to Japanese observers, ended, and encouragement

is found in both the important trade relations concluded

recently with Germany and the lesser economically but still politically valuable agreement a made with italy and Poland.

Symptomatic also of the feelings of the younger Japanese

members of the administration is the remark made to me three

times lately by the Special Delegate for Foreign Affairs to

the effect that Lanchoukuo regards it as an affront that the

changed status of Ethiopia should have been recognised, whilst her own separate existence remains ignored by certain

great Powers.

3.

The solemn undertaking to preserve the "open door"

and to honour the obligations succeeded to by the new state

has now been repudiated by word as well as by deed and it may

be expected that representations based on our Treaty rights

will, in future, be rejected on the more positive principles

enunciated in the Premier's statement.

4.

In throwing off the mask Manchoukuo evidently

relies on the political strength of the totalitarian powers

and Japan's aspirations for economic dictation in the Far

East, but it is to be noted that the Premier would not

reject foreign capital, provided it would enter to assist

Manchoukuo in developing her own resources.

5.

As the Polis Consul's seat of ofiice has not yet

been affected by the agreement recently published this

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despatch

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