An old soc.history.what-if post of mine on the possibility of Chinese-Japanese rapprochement in the mid-1930's:
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In 1934 it seemed that a Chinese-Japanese rapprochement (based on Chinese *de facto* recognition of Manchukuo and Japanese promises not to move any further south) was a possibility. In Japan the key figure supporting such a policy was Hirota Koki, who either as Foreign Minister (as in 1934) or as Prime Minister was the most important civilian politician in Japan in the mid-1930s: "cooperation among Japan, Manchukuo and China" was his slogan. Hirota appreciated Chiang Kai-shek's efforts to destroy the Chinese communists. Hirota also wanted reconciliation with America and Britain--provided of course that they would recognize the new realities in East Asia. (After all, shouldn't the US realize that Japan was seeking no more in East Asia than the US enjoyed in Latin America with the Monroe Doctrine?) According to Akira Iriye, "Japanese aggression and China's international position, 1931-1949" in the *The Cambridge History of China, Volume 13: Republican China 1912-1949, Part 2* (edited by John K. Fairbank and Albert Feuerweker (Cambridge UP 1986), pp. 510-511 (all references in this post are to this book, unless otherwise indicated):
"Hirota was not without success in 1934. At least outwardly, the Japanese military endorsed the strategy of using peaceful and political means to consolidate Chinese-Japanese ties and promote Japanese interests in China. There were, to be sure, those in the Kwantung Army and the Boxer Protocol Force in Tientsin (the so-called Tientsin Army) who were already plotting to penetrate North China. The South Manchurian Railway, anxious to keep its monopoly in the economic development of Manchuria but coming, for that reason, under increasing attacks from non-business Japanese expansionists, was also interested in extending its operations south of the Great Wall. At this time, however, these moves were not crystallizing into a formidable scheme for Japanese control over North China. Certainly in Tokyo the government and military leaders were content with the achievements of 1931-3.
"The powers, on their part, were generally acquiescent in the Japanese position in Manchuria. They even showed some interest in investing money in economic development there. With Japan stressing cooperation anew, the confrontation between Japan and the Anglo-American powers was disappearing. There were irritants, to be sure, such as the Amo [Amau] statement of 17 April 1934, in which the Foreign Ministry spokesman strongly rejected other countries' military aid to China as well as such economic and technical assistance as had political implications. The statement was ambiguous, and when Washington and London sought clarification, the Foreign Ministry immediately backed down, reiterating its adherence to international cooperation. No amount of rhetoric, of course, could hide the fact that Japan perceived itself as the major East Asian power. However, it was ready to re-establish the framework of international cooperation on that basis..."
As for Nanking, some personnel changes suggested that it too was ready to deal:
"T. V. Soong, the outspoken denouncer of Japanese aggression, when he returned from London in late 1933, had been replaced by H. H. Kung. Wang Ching-wei [Wang Jingwei] stayed on as foreign minister, and T'ang Yu-jen, a Japanese educated bureaucrat, was appointed vice foreign minister. Kao Tsung-wu, another graduate of a Japanese university, was recruited to become acting chief of the Foreign Ministry's Asian bureau. Underneath these officials, there were many more who had been trained and educated in Japan. Unlike more famous diplomats such as Alfred Sze and Wellington Koo, who were almost totally Western-oriented, these officials had personal ties with Japanese diplomats, intellectuals, and journalists. Matsumoto Shigeharu's memoirs, the best source for informal Chinese-Japanese relations during 1933-7, lists not only Wang, T'ang, and Kao, but scores of businessmen, military officers, intellectuals, and others with whom he had contact at this point, most of whom, he reports, expressed a serious desire for accommodation with Japan." (p. 512)
Those who felt this way had various motives. Some thought that the Communists, both Chinese and Russian, were a more serious threat to China than Japan was. Others wanted Japanese help in the industrialization of China; they looked to the Western powers as well for capital and technology, but they believed that such enterprises could not succeed if Japan was excluded. Finally, of course, they all wanted to stop further Japanese aggression, and felt that only by recognizing what Japan had already achieved and co-operating with the relative moderates in the Japanese government could the expansionist extremists in Japan be checked.
"This was the background of the talks Minister Ariyoshi Akira held in 1934 with Chinese officials, including Foreign Minister Wang Ching-wei. The atmosphere was so cordial that Wang issued only a perfunctory protest when the Amo statement was published. A series of negotiations was successfully consummated, covering such items as mail and railway connections between Manchuria and China proper, tariff revision, and debt settlement. Toward the end of the year Japan expressed its readiness to raise its legation in China to the status of embassy, symbolizing Japan's recognition of China's newly gained position as a major nation...[A rapprochement] would entail at least tacit recognition of the status quo, China accepting the existence of Manchukuo as a separate entity and Japan pledging not to undertake further territorial acquisitions southward. China would also promise to suppress anti-Japanese movements by students, journalists, politicians and warlords, in return for which Japan would assist its economic development." (pp. 512-13)
One thing that caused Chinese officials to favor rapprochement with Japan was that the Chinese were disappointed with how other nations were acting. The international ostracism of Japan which the Chinese had hoped for had not come about. The US under the Silver Purchase Act was buying up silver at a price above world market rates. [1] "The immediate result was a huge drainage of silver from other countries, notably China, causing severe shortages and monetary crises. Banks closed and shops went out of business. Resentment of the United States mounted, matched by a belief that China might have to live with Japan. Britain stood ready to help put China's finances back in order, but it was unlikely to undertake large-scale projects without Japan's endorsement..." (p. 513)
In 1935, the Nationalist government did crack down on anti-Japanese boycotts and demonstrations, and Japan did raise its legation to an embassy, an elaborate ceremony being held in Nanking on June 15. However, that same year saw the beginning of the end of the reconciliation. According to Iriye, General Doihora Kenji, head of the Kwantung Army's special affairs division, was the man most to blame for undermining the incipient accommodation. Doihara argued that Chiang Kai-shek and Wang Ching-wei should not be trusted; they were not true friends of Japan but were simply acting as such because China was so weak. The only correct policy was for Japan to consolidate its power in northern China by bold moves. He aimed to remove Kuomintang power in northern China, establish separatist "autonomous" puppet regimes there, and integrate the area economically with Manchukuo.
If Hirota was serious about reconciliation, he had to suppress Doihara's separatist moves in North China. These moves coincided with the coming to East Asia of the British economic mission led by Frederick Leith-Ross, aiming at Anglo-Japanese cooperation for the development of China:
"By rejecting the British offer to cooperate, the Japanese government showed a complete lack of flexibility and imagination. Now more than ever before such cooperation should have been welcomed, but this was the very thing the army expansionists were determined to oppose. International arrangements to rehabilitate China not only would restrict Japan's freedom of action, but also would strengthen the central government at Nanking. These very reasons might have convinced Foreign Minister Hirota to take a gamble and work with Leith-Ross, but he utterly failed to grasp the significance of the mission and did nothing to encourage it. Nor did he do much to oppose separatist moves by the army in China..." (p. 515)
China's leaders could not remain conciliatory while the Japanese army was stripping China of its northern provinces. Chiang might have preferred to postpone a showdown with the Japanese until he had destroyed the Communists (the former to Chiang were a "disease of the skin" whereas the latter were a "disease of the heart"); but however authoritarian Chiang's government was, it could not ignore public opinion. Students held massive demonstrations in defiance of government bans. The Chinese Communists began to agitate for a new United Front. Pro-Japanese officials like Wang Ching-wei lost influence; Wang was the target of an assassination attempt in late 1935. Meanwhile, the Japanese, having alienated both China and the "Anglo-Saxon" powers, turned to Germany and joined the "anti-Comintern pact"--but all this did was to encourage the USSR to strengthen China's defenses and press harder for a KMT-Communist united front. This culminated in the Sian (Xi'an) Incident, which left China united as it had not been for decades. At the same time, the hope for a self-sufficient Japan-Manchukuo-China economic bloc proved illusory: In 1936 Asia accounted for only 38.2 percent of Japan's total imports and 50.9 percent of its exports. There was a heavy balance of payments deficit with the US (which provided more than 30 percent of Japan's imports and took more than 20 percent of its exports) and the UK.
The interesting thing is that by the spring of 1937 the Japanese government actually realized that its policy was not working. The key documents in its self-appraisal were "Implementation of policy toward China" and "Directives for a North China policy," both adopted on April 16, 1937 by the four ministers' conference (the foreign, finance, war, and navy ministries). As Iriye summarizes them (p. 517) "The documents stressed 'cultural and economic' means to bring about 'coexistence and coprosperity' between the two countries, and the need to 'view sympathetically' the Nanking government's effort to unify China. It was decided not to seek North China's autonomy or to promote separatist movements...The economic development of North China...should, according to the new directive, be carried out through the infusion of Japan's private capital as well as Chinese funds. Third powers' rights would be respected, and cooperation with Britain and the United States would be promoted." It was a remarkable reversal of policy, but made too late: Nobody in China trusted Japan any more, and Chiang Kai-shek's authority depended on taking a strong anti-Japanese stand. The Western powers too were less inclined to appease Japan than they had been a few years earlier. Any chance for reconciliation was destroyed by the Marco Polo Bridge Incident--which, incidentally, might plausibly have been avoided; unlike many of the "incidents" of the prior years, it seems to have been an accident, not something premeditated by the Japanese Army--and subsequent Sino-Japanese War.
So the question is: Can we imagine either a Hirota willing to stand up to the Kwantung Army back when doing so might have made a difference (1935) or alternatively a Kwantung Army led by someone less rabidly anti-Chiang than Doihora? With regard to the former possibility, Japanese civilian politicians who defied military pressure in the 1930s risked their lives, so perhaps the latter hypothesis is more worth exploring. I don't think it inconceivable that an alternate leadership of the Kwantung Army might have concluded that at least a temporary reconciliation with Chiang was desirable so as not to distract Japan from a possible future war with the Soviet Union. Surely in the event of such a war it would help to have at least a neutral (if not actually favorable) China, US, and UK; and certainly the last thing that a Japan concerned about the Soviet Union should want would be to get bogged down in fighting in China. (A problem of course is that even in 1937 the Japanese did not believe they ever *could* get bogged down in China; after the Marco Polo Bridge Incident, they expected at most a short, victorious war, limited to North China...)
One other thought: If Sun Yat-sen had lived, what would be his attitude? (Of course if he had lived, all sorts of other things might have changed--for example, it is possible that the Kuomintang-Communist break might never have occurred, but I will deal with that question in another post some day...) Sun seems to have had a sentimental attachment to Japan and the idea of pan-Asianism throughout his life, even when he had to concede that Japan was behaving worse than the "white" powers. Even as late as 1924, when Sun had decided on an "anti-imperialist" alliance with the Soviet Union and a United Front with the Chinese Communist Party, he still appealed to Japan for help--perhaps hoping to reduce his one-sided dependence on the Soviet Union. (As one might expect, the appeal fell on deaf ears; Japan, like the western powers at that time, preferred to deal with the warlords of Beijing.) Wang Ching-wei and other advocates of reconciliation with Japan loved to refer to all the pro-Japanese statements Sun had made throughout his life. In fact, when Wang later became head of the Japanese puppet government in China, he had an anthology of Sun's pro-Japan and pro-pan-Asian writings and speeches published under the title *China and Japan: Natural Friends, Unnatural Enemies.* (Shanghai: China United Press, 1941). It is indeed possible that Sun would have acquiesced reluctantly in the loss of Manchuria. According to Marie-Claire Bergere, *Sun Yat-sen* (Stanford University Press 1998), pp. 265-6, "In January 1914, Sun Yat-sen gave his blessing to Chen Qimei's expedition to Manchuria. Not much is known of this expedition, but the plan probably involved having the revolutionaries make contact with Prince Su's monarchists and help establish the separatist kingdom of Manchuria that some Japanese leaders already had in mind. It is known that unlike Song Jiaoren and a number of the other revolutionary leaders, Sun had never evinced any passionate nationalism with regard to these regions of the northeast. Perhaps this was because they had formerly been the territory of barbarian tribes, only annexed to China at the beginning of the twentieth century. Sun considered that these territories were 'not all of China,' if they were lost, 'the true China,' the China of the Han, would still remain." Also, in 1915, worried about the negotiations between Yuan Shih-kai and the Japanese, Sun wrote a letter to the Japanese Minister of Foreign Affairs "in which he offered the Tokyo government even greater concessions than those claimed in the Twenty-one Demands." Bergere, p. 264. Wang has often been criticized for his opportunism, but perhaps in this respect he was being more faithful to Dr. Sun's memory than is usually believed...
Thoughts?
[1] The extent to which the Silver Purchase Act actually hurt China has been debated. "Brandt and Sargent (1989) and Rawski (1993) challenge [Milton] Friedman's (1992) view that the Chinese economy suffered from the US silver purchase program and the ongoing rise in silver prices and China's exchange rate, however. Given that there is no argument that China endured severe deflation between 1932 and 1934,2 these revisionist views imply that not only was a silver-based country not hurt by a rising world silver price but also that the real economy remained robust to double-digit deflation. But, after large-scale silver purchases got underway, US exports to the rest of the world rose between September 1934 and September 1935 rose while exports to China
fell by 38% (Westerfield, 1936, p. 112). Longer-run time series analysis by Bailey and Bhaopichitr (2004) suggests that the world silver price appears to have had a significant effect on China's own exports over the 1866-1928 period. Meanwhile, a plethora of accounts by both Chinese and western contemporaries and observers echo the view that China was significantly hurt by the rising silver price in the 1930s and that the accelerating deflation had severe effects on the real economy."
https://www.econstor.eu/obitstream/10419/31418/1/508648971.pdf Regardless of the extent of damage to China, US silver policy was of course indefensible. The only mitigating factor that could be cited in FDR's favor is that after all it was the Founders, not FDR, who provided that each state, large or small, would have two senators--with the result that "a minor industry, employing in 1939 less than five thousand persons, the silver industry, in effect, held the government to ransom" through its control of fourteen Senate seats in sparsely populated Western states. Arthur Schlesinger, Jr., *The Coming of the New Deal,* p. 252.
http://books.google.com/books?id=mj3VmJ38tHIC&pg=PA252