China Is basically the same towards German economic lnterests9 a certain difference is shown in the atmosphere's mood* The Kwantung Army which protects the Japanese flank in Manchuria and Inner Mongolia against Russia, shows a certain willingness for cooperation with Germany, whereas they consciously prejudice themselves over against the English. On the other hand, the commercial expert reports about the Japanese attitude in Middle China (V VII 1731 of 23 June): 'Whereas the German merchants in North China are shown a certain consideration, the Japanese military and official sources here are apparently ashamed of this friendship, especially over against the English* Instead of avowing oneself openly to it by permitting the German merchants something which one wants to refuse to the others, one only always talks about cooperation with Germany, and this as much as possible In private circles, that is, for the purpose of re¬proaching us or to demand something from us*^ Consul General FISHER has referred the Japanese Consulate General in Shanghai, with which he was negotiating about a few factories which are under German Influence, to the assurance of the Japanese Government to treat German interests preferentially* The Japanese Consul SONE answered to this that the Japanese Consulate had not received any such Instructions and that it was impossible to make a distinction in the treatment of the members of the various foreign nations.