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succeeded one another from 1908 until to-day has drawn attention to the vulnerable character of those interests.
The dependence of Japan on the Chinese market is fully recognised by the Japanese themselves. On the other hand, China is a country which stands in the most urgent need of development in all fields of economic life, and Japan, which in 1931, notwithstanding the boycott, occupied the first place in her total foreign trade, seems, more than any other foreign Power, indicated as an ally in economic matters.
The interdependence of the trade of those two neighbouring countries and the interests of both call for an economic rapprochement, but there can be no such rapprochement so long as the political relations between them are so unsatisfactory as to call forth the use of military force by one and the economic force of the boycott by the other.
Chapter VIII.
ECONOMIC INTERESTS IN MANCHURIA.[1]
It has been shown in the preceding chapter that the economic requirements of Japan and China, unless disturbed by political considerations, would lead to mutual understanding and co-operation and not to conflict. The study of the inter-relation between Japanese and Chinese economic interests in Manchuria, taken in themselves and apart from the political events of recent years, leads to the same conclusion. The economic interests of both countries in Manchuria are not irreconcilable; indeed, their reconciliation is necessary if the existing resources and future economic possibilities of Manchuria are to be developed to the fullest extent.
In Chapter III, the claim of Japanese public opinion that the resources, both actual and potential, of Manchuria are essential to the economic life of their country has been fully examined. The object of this chapter is to consider how far this claim is in conformity with economic facts.
Investments.It is a fact, in South Manchuria, that Japan is the largest foreign investor, whereas in North Manchuria the same is true of the U.S.S.R. Taking the Three Provinces as a whole, the Japanese investments are more important than those of the U.S.S.R., although precisely to what extent it is difficult to say because of the impossibility of obtaining reliable comparative figures. As the subject of investments is examined in detail in an annex to this Report, a few essential figures will be sufficient to illustrate the relative importance of Japan, the U.S.S.R. and other countries as participating factors in the economic development of Manchuria.
According to a Japanese source of information, Japanese investments were estimated in 1928 at about 1,500,000,000 Yen, a figure which, if correct, must have grown to-day to approximately 1,700,000,000 Yen.[2] A Russian source puts Japanese investments at the present time at about 1,500,000,000 Yen for the whole of Manchuria inclusive of the Kwantung Leased Territory, and at about 1,300,000,000 Yen for the Three Provinces, the bulk of Japanese capital being invested in Liaoning Province.
