Appendix No. 11

Fundamental Policy to deal with the China Incident (Decided at the Council in the Imperial Presence on 11 January 1938)

It is the immutable policy of the Empire to form with Manchukuo and China an axis of cooperation for peace in the Orient. This axis in turn will serve as the nucleus of the establishment of global peace.

In accordance with the above policy, the current China Incident will be dealt with the ultimate objective of resorting diplomatic relations between Japan and China with all outstanding conflicts eliminated, thus effecting a harmonious union between the two nations based on mutual respect for sovereignty and territory. To attain this objective, measures that will guarantee prevention of the occurrence of future incidents should first be established, and also observance of the following clauses should be pledged by both nations:

1. Japan, Manchukuo and China will abandon such policies, education and trade programs, and all other means as would destroy mutual friendship. They will further prohibit all activities that might induce such evil results.

2. Japan, Manchukuo and China will cooperate in pursuing cultural activities and in executing anti-Communist defense policies.

3. Japan, Manchukuo and China will commit themselves to work for mutual benefits in the spirit of augmenting one another's requirements in industry finance and other affairs.

In conformity with the above policy, Japan will endeavor to carry out the following plans through close coordination of political and military resources:

1. If the existing Central Government of China at this time reflects upon its actions and corrects its attitude and sincerely seeks peace, Japan will open negotiations in accordance with Appendix


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A, the "Terms for Peace Negotiation between Japan and China." If Japan later confirms that the peace terms are being faithfully observed by China, she will not only remove the security clauses included in these terms, as indicated in Appendix B, but will also cooperate willingly in the reconstruction and development of China.

2. In case the central government of China does not seek peace, the Empire will no longer expect to settle the Incident through negotiations with that government, but will encourage the creation of a new Chinese regime, with which to conclude agreements looking to the restoration of friendly relations and cooperation in the construction of a reborn China. Moreover, the Empire will then endeavor either to destroy the existing central government of China or else to induce it to join the new central regime.

3. To carry through the above policy for settling the Incident in the face of possible changes in the international situation, Japan will speedily raise the over-all power of the nation, especially national defense potential, as well as endeavor to maintain and improve friendly relations with other foreign powers.

4. Japan will respect the rights and interests of other foreign powers in China and will seek to attain a top position through free competition for economic development of China.

5. Japan will guide public opinion so that the true intent of the aforementioned fundamental policy for settling the Incident will be thoroughly understood. This also applies to the enlightenment of other nations.

Appendix A

Specific Terms for Peace Negotiation between Japan and China

1. China will formally recognize Manchukuo.

2. China will abandon her anti-Japanese and anti-Manchukuo policies.


Appendix No. 11

3. Demilitarized zones will be created in North China and Inner Mongolia.

4. North China will establish appropriate organs under the Chinese Government which will bring into reality the co-prosperity of Japan, Manchukuo and China and invest those organs with extensive authority with the specific aim of satisfactorily carrying on tripartite economic collaboration.

5. Inner Mongolia will have an autonomous anti-Communist government, vested with an international status equaling that of the present government of Outer Mongolia.

6. China will cooperate in the prosecution of the anti-Communist defense policies of Japan and Manchukuo by establishing a similar policy of her own.

7. Demilitarized zones will be created in occupied areas of Central China while the maintenance of public order and the development of an economy in the Greater Shanghai area will be exercised jointly by Japan and China.

8. Japan, Manchukuo and China will conclude necessary agreements on such matters as the development of resources, customs duties, trade, aviation, transportation and communications.

9. China will make such reparation as necessary to the Empire.

Supplementary Terms:

1. For security purposes Japanese armed forces will be garrisoned for a required period of time in specific parts of North China, Inner Mongolia and Central China.

2. Armistice negotiations will be opened after agreement is reached between Japan and China on the above-mentioned clauses. If the Chinese Government is found to be sincerely observing the above terms and truly cooperating with us for the realization of our ideal of effecting a link of collaboration and mutual aid between Japan and China, Japan is prepared not only to remove the security clause


Appendix No. 11

included in the above terms, but also to take the initiative in cooperating with China in rehabilitating and developing the nation as well as in meeting the desires of her people.

Appendix B

1. Those clauses of Appendix A dealing with security area:

a. The demilitarized zones cited in Item 3.
b. Privileges to be accorded and organs to be retained to guarantee the execution of terms stipulated in Item 4.
c. Demilitarized zones indicated in Item 7.
d. Item 1 of the supplementary terms as well as other privileges concerning the maintenance and enlargement of military installations and main transportation facilities incidental to the execution of this agreement.

2. Standing agreements to be abolished incidental to the conclusion of peace:

a. Umezu-Ho Ying-chin Agreement, Taku Cease-fire Agreement, Doihara-chin, Techun Agreement, and Shanghai Cease-fire Agreement.
b. With the removal of the security clauses, Japan will consider abolition of her standing special privileges in China (extraterritoriality, concessions, stationing of troops, et cetera).


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