The Far East

ON THE WORLD TODAY

IN India, Britain has exchanged a weakening British rule for a position, in some ways stronger, as arbiter between Indian factions which are not quite sure of the strength and distribution of their backing. Britain’s economic position, though weak relative to that of the United States, remains strong relative to India’s. The key to this position is the sterling balance owed to India by Britain. India, unlike China and the rest of colonial Asia, was neither occupied nor blockaded by Japan during the war.

Britain drew heavily on India for supplies and manpower, with the result that India’s ancient debt to Britain was wiped out, while Britain ran into debt to an amount which some British sources contend to be less than five billion dollars, but which Indians claim to be much more.

The importance of this money is not to be estimated by averaging it out at a per capita rate of some $15 owed by Britain to each Indian in a population of approximately 400 million. The money means more to some Indians than it does to all Indians.

It lumps up into huge credits, most of which will eventually accrue to those who control India’s industries, raw materials, and grain. It is, however, much too large a sum to be paid back freely. It is a blocked credit, because Britain does not have that much money. Its eventual flow back to India must be controlled by negotiation.

Britain stands in a better position to negotiate with the representatives of the Indians who will eventually get most of the money than with the statistical mass of the “average” Indian. Gandhi, Nehru, and Jinnah alike, though they often appear to Americans to be doctrinaire, intransigent, or fanatical, are regarded by the British as the natural agents of compromise.

Though they represent ideals of nationalism and full independence, they also represent the interests of those Indians who will gain most by arrangements which will enable Britain to earn the money to pay off the blocked sterling balances. The Indian National Congress is financed principally by Indian industrialists, and the Moslem League principally by landowners.

The Dutch and the Indonesians

The economic factor which works out as a compromise in India proves to be a bone of contention in Indonesia. Here, during the war, great stocks of exportable produce accumulated, which lack of shipping prevented the Japanese from carrying off.

Britain, impoverished by the war, puts pressure on the Indians to negotiate by reducing her imperial commitments and thus increasing the economic as well as the political responsibilities of India’s political spokesmen. Holland, impoverished by the war, sees wealth in sight if Dutch authority can re-establish itself in Indonesia. For months now the Indonesian Republic has been trying to finance itself by shipping out stock-piled produce.

The Dutch, in their efforts to force the Republic into political retreat, have blockaded the islands to prevent trade. By so doing, however, the Dutch have created a situation in which the hopes of all Indonesians stand or fall together, and it is this that accounts for the continuing militant appeal of the Indonesian leaders to the rank and file.

This situation also accounts for the extraordinary bitterness of the colonial Dutch toward Britain. The Dutch, trying to get hold of actual goods while the British are negotiating about credits, feel that they were let down when Britain refused to continue military action in Indonesia on their behalf. The British, for their part, are made nervous by the way the Dutch military hanker for action. They are sure that an attempt at military reconquest would make the Indonesians more militant and more radical, and that if Indonesia were to burst into flames, the fire would spread into Malaya, Burma, and India.

The drain on Holland

American policy has unostentatiously but firmly swung in behind the British. America sees no need for the complete rehabilitation of Dutch authority as a prerequisite to the resumption of trade with Indonesia. The goods are there for America to buy, the markets are there for America to sell, and Indonesian leaders have shown as much capability and responsibility as America is accustomed to find in most Latin American countries.

Native Communism is not widespread. Russian influence could hardly be more remote. A savage colonial war, however, might make the Communists more radical and would certainly make all militant nationalists look longingly toward Russia.

Division of opinion between the extremist Dutch and the moderate Dutch has been carried back to the homeland. Holland has built up a force oF about 100,000 in Indonesia — an enormous effort for so small a country. In proportion to population this is equivalent to an American overseas army of something like a million and a half.

The drain on Holland inevitably has begun to tell. The Dutch Labor Party, which as a middle-of-theroad party lost heavily to the Left in the elections, has been forced to take a somewhat more radical position. It passed a resolution which, though worded so diplomatically that it could be quoted with approval by both the Dutch and the Indonesian radios, advocated reduction of Dutch armed forces, recall of Dutch officials who had fostered an anti-Republic puppet party in Republican territory, and moderation of the bellicose tone of the Dutch Information Service in Indonesia.

The resolution was more important than appeared on the surface, because the Labor Party has been participating in the Dutch government through a somewhat shaky coalition with the more conservative Catholic Party, which would like to send its own nominee to Indonesia as Governor-General to conduct a more forceful policy.

The Kuomintang loses ground

In China, alarmist reports of the coming “collapse” of the Kuomintang may be discounted. As long as the Kuomintang holds the major seaports, it will receive enough arms and aid to survive, if only as a lever through which American policy can influence the composition and character of the future government of China.

This new government will inevitably be a compromise government. The question is, What kind of compromise? As its power declines and it becomes less able to pose as a government of all China, the Kuomintang inevitably emphasizes the ascendancy of Russia in Sinkiang, Mongolia, and Manchuria. To place this emphasis on the consequences of the Kuomintang’s unwillingness to compromise is to invite the partition of China into spheres of Russian and American control.

No such partition is necessary, nor is it desirable from the point of view of American policy. The American interest lies not in preponderant trade and investment in partitioned areas, but in the widest possible trade and investment in unpartitioned areas.

In the present situation in China, territorial disintegration is even more important than political disintegration. By refusing to compromise, especially on agrarian reform, the Kuomintang has weakened itself in its struggle with the Communists, presenting them with the highly advantageous leadership of a coalition of true communists, agrarian reformers who are demanding — and getting — redistribution of land as private property, not collectivized property, and growing numbers of merchants, small-scale private producers, and educated intelligentsia.

As the government weakens in the struggle with the Communists, it weakens also in its ability to control any kind of separatism. Outlying provinces in the northwest, west, and south tend to become selfgoverning areas, remitting less and less revenue to the National Government.

Manchuria for China

This territorial disintegration will in due course produce a demand for reintegration. The way will then be open for the reunification of China on the basis of a federal union of territories, each of which will surrender certain functions to a new central government but will retain a certain number of political and economic functions of its own. A federal union of this kind will prove to be much more practical than a “coalition” of two militant parties, each of which thoroughly distrusts the other.

This situation, which is already beginning to develop, will be more amenable to American policy than was the original Kuomintang-Communist deadlock with which General Marshall wrestled in vain. The fear of Russian ascendancy in the north should not be exaggerated. Sinkiang and Mongolia, whose populations are overwhelmingly non-Chinese and non-Russian, will always be buffers between the Chinese and the Russians. They do not properly belong within the scope of Chinese domestic policies. Manchuria does.

Manchuria is as overwhelmingly Chinese as Sinkiang is non-Chinese, and any attempt by Russia to detach Manchuria from the rest of China would turn against the Russians the nationalism not only of the Chinese south of the Great Wall, but of the Manchurian Chinese as well.

The Chinese of Manchuria are men of tough fiber Their basic political concept has long been one of federal union with China. They have always resisted control by any Chinese government in which they were not strongly represented. Nor do they want to be independent. They want to be part of a China in whose government their representation is proportionate to their wealth in natural resources, their industrial superiority to the rest of China, and their strategic importance.

Trade with Russia

Manchuria, because of its modern communications, can send out more exports and take in more imports than any other area of equal size in China. But Manchuria can trade with the rest of China only to the extent that China south of the Great Wall becomes peaceful and stable enough to develop similar communications and a similar ability to export and import.

Until then Manchuria will trade with Siberia by necessity. Rail and river communications are good, and Siberia has an increasing capacity to consume food and raw materials from Manchuria, and to export the consumer goods which Manchuria needs.

These considerations add up to a clear indication of what American policy should be. We do not want the association of Manchuria with Siberia to be too close or exclusive. It is to our interest to develop the trade of Manchuria with the rest of China, and the trade of China as a whole with America. We can best promote this interest by promoting an all-round, negotiated, federal unification of China, leading to increased Chinese domestic trade and an increasing import and export trade.

New power in Asia

As the new centers of gravity in Asia emerge, it becomes clearer that Korea, Japan, and the Philippines are not true centers of gravity. They are holding points. Of the three, Japan is the most important; but even as a holding point Japan offers the appearance rather than the reality of power.

Too much has to be put into Japan, which is deficient in raw materials. Either the raw materials have to be brought from outside of Asia, at uneconomic expense, or they have to be brought from Asia. But to bring them from Asia, the peace, prosperity, and trade of Asia have to be restored.