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 Straits and sea of Japan; d) the advisability of of a "policy of friendship" on the part of Japan towards China in order to assure the realization of the Japanese program of exploitation.

Important for Japan is also China's role with respect to coal exports. Thus of the total Japanese imports of coal, 80% come from China and Shantung. The same also applies to cotton; if Japan desires to free its textile industry from dependence upon America, Yet in China itself, Japan has concentrated more than a third of the textile industry in its hands, whereas British capital has captured only 5% of the textile factories. These figures alone do not give an exact picture, because Japan has used the crisis in the Chinese textile industry to buy up a part of the Chinese textile industry which outwardly continues to appear as "Chinese" enterprises. Japanese railway capital now holds first place. Even though Japan has no such banks as the Hongkong-Shanghai Bank which in practice handles all currency questions, it has nevertheless 31 smaller banks. And in recent times, especially after the Hongkonk events, Japan has made still further headway in China. It is sufficient to point out that Japan's favorable balance of trade with China during the first quarter of this year has doubled in comparison with the same period last year. Thanks to low wages in China, the profit of the Japanese capitalists in the textile industry takes on literally terrific dimensions. Thus, e. g. certain Japanese textile enterprises in China pay their stockholders 150% dividends. The military-strategic and the economic interests of Japan are too deeply anchored in China to tolerate a realization of the American plan. From this the laboring masses of China can draw three different conclusions: a) it must be taken into consideration already now that further American advance in China will compel Japan to launch a preventive war sooner than the American and Japanese war literature predicts,