936); but it was still doubtful whether the Western powers would
proceed with Russia, and therefore against Japan, or with the Axis, and
therefore in alliance with Japan.

Japan for her part considered that if she was to raise the standard of
living of her large population and to remain a world power, she must
bring into being her "Greater East Asia", so as to have the needed raw
material sources and export markets in the event of a collision with the
Western powers; in addition to this, she needed a security girdle as
extensive as possible in case of a conflict with Russia. In any case,
"Greater East Asia" must be secured before the European conflict should
break out.

4 _The Sino-Japanese war_ (1937-1945)

Accordingly, from 1933 onward Japan followed up her conquest of
Manchuria by bringing her influence to bear in Inner Mongolia and in
North China. She succeeded first, by means of an immense system of
smuggling, currency manipulation, and propaganda, in bringing a number
of Mongol princes over to her side, and then (at the end of 1935) in
establishing a semi-dependent government in North China. Chiang Kai-shek
took no action.

The signal for the outbreak of war was an "incident" by the Marco Polo
Bridge, south of Peking (July 7th, 1937). The Japanese government
profited by a quite unimportant incident, undoubtedly provoked by the
Japanese, in order to extend its dominion a little further. China still
hesitated; there were negotiations. Japan brought up reinforcements and
put forward demands which China could not be expected to be ready to
fulfil. Japan then occupied Peking and Tientsin and wide regions between
them and south of them. The Chinese soldiers stationed there withdrew
almost without striking a blow, but formed up again and began to offer
resistance. In order to facilitate the planned occupation of North
China, including the province of Shantung, Japan decided on a
diversionary campaign against Shanghai. The Nanking government sent its
best troops to the new front, and held it for nearly three months
against superior forces; but meanwhile the Japanese steadily advanced in
North China. On November 9th Nanking fell into their hands. By the
beginning of January 1938, the province of Shantung had also been
conquered.

Chiang Kai-shek and his government fled to Ch'ung-k'ing (Chungking), the
most important commercial and financial centre of the interior after
Hankow, which was soon threatened by the Japanes