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 Yen out of her total investments abroad of 2,100,000,000 Yen, showing that Japan's investments abroad have been almost entirely confined to China and Manchuria, the latter having absorbed by far the greater part of this investment (particularly in railways).

Apart from these investments, China has been indebted to Japan for various State, provincial and municipal loans which, in 1925, were estimated at a total of 304,458,000 Yen (the greater part unsecured), plus 18,037,000 Yen interest.

Although the bulk of Japan's investments are in Manchuria, a considerable amount is invested in industries, shipping and banking in China proper. Nearly 50 per cent of the total number of spindles operated in the spinning and weaving industry in China in 1929 were owned by Japanese. Japan was second in the carrying trade of China, and the number of Japanese banks in China in 1932 is put at thirty, a few of which are joint Sino-Japanese enterprises.

Although the foregoing figures are stated from the standpoint of Japan, it is easy to see their relative importance from the standpoint of China. Foreign trade with Japan has held first place in the total foreign trade of China up to 1932. In 1930, 24.1 per cent of her exports went to Japan, while in the same year 24.9 per cent of her imports came from Japan. This, in comparison with the figures from Japan's standpoint, shows that the trade of China with Japan is a greater percentage of her total foreign trade than is the trade of Japan with China of the total foreign trade of Japan. But China has no investments, banking or shipping interests in Japan. China requires, above all else, to be able to export her products in increasing quantities to enable her to pay for the many finished products she needs and in order to establish a sound basis of credit on which to borrow the capital required for further development.

From the foregoing, it is evident that Sino-Japanese economic and financial relations are both extensive and varied, and, consequently, easily affected and disorganised by any disturbing factor. It also appears that, in its entirety, Japanese dependence on China is greater than China's dependence on Japan. Hence Japan is the more vulnerable and has more to lose in case of disturbed relations.

It is therefore clear that the many political disputes which have arisen between the two countries since the Sino-Japanese war of 1895 have in turn affected their mutual economic relations, and the fact that, in spite of these disturbances, the trade between them has continued to increase proves that there is an underlying economic tie that no political antagonism has been able to sever.

For centuries the Chinese have been familiar with boycott methods in the organisation of their merchants, bankers and craft guilds. These guilds, although they are being modified to meet modern conditions, still exist in large numbers and exercise great power over their members in the defence of their common professional interests. The training and attitude acquired in the course of this century-old guild life has been combined, in the present-day boycott movement, with the recent fervent nationalism of which the Kuomintang is the organised expression.

The era of modern anti-foreign boycotts employed on a national basis as a political weapon against a foreign Power (as distinct from a professional instrument used by Chinese traders against each other) can be said to have started in 1905, with a boycott directed against the United States of America because of a stipulation in the Sino-American Commercial Treaty, as renewed and revised in that year, restricting more severely than before the entry of Chinese into America. From that moment onward