Report (June 10) Characteristics of the Current Situation The defining feature of the current situation is that the possibility of the Kuomintang’s surrender has become the gravest danger, while its anti-Communist activities constitute steps preparatory to such a surrender.
The prospect of the Kuomintang’s capitulation has been present since the beginning of the War of Resistance; it did not arise suddenly today. However, its emergence as the greatest threat to the national situation is a phenomenon unique to the present political climate.
Similarly, the Kuomintang’s anti-Communism has existed since the establishment of the United Front; it too is not a recent development. What is new, though, is the fact that this anti-Communism is now being employed as an immediate preparatory measure for surrender.
This prevailing situation has arisen from three principal factors: first, Japan’s policy of inducing surrender; second, international pressure; and third, the wavering stance of China’s landlord–bourgeois class.
These will be discussed in turn below:

I. The Historical Evolution of Japan’s Policy of Inducing Surrender (1) Japan’s fundamental policy toward China has always been to destroy China and establish the so-called “New Order in East Asia”—a policy that has remained firm and unchanging, and which, in the eyes of the Japanese aggressors, cannot be altered.
On January 2 of this year, an editorial in Tokyo’s Kokumin Shimbun, the military regime’s official newspaper, stated: “The pressing reality before us allows no room for even an inch of retreat or a moment’s hesitation. As the conflict enters its concluding phase, any lapse in the state’s control would not only squander our gains but also jeopardize the nation’s very destiny. The later stages of war are many times more difficult than the initial ones, as history has amply demonstrated. The unfortunate experiences of Germany and Russia during the Great European War serve as sobering lessons that both leaders and citizens must carefully heed.” (“World Knowledge,” Vol. 9, No. 1, published February 1.) In short, Japan’s basic aggressive strategy must be carried out to the end; otherwise, there looms the danger of revolutions like those in Germany and Russia.
It follows that the notion that Japan might fundamentally yield, or that British and American pressure could restore the status quo ante Lugou Bridge without prolonged warfare—held by Chiang Kai-shek and many within the Kuomintang—is nothing more than a delusion. (2) While Japan’s fundamental policy of “destroying China and establishing the New Order in East Asia” remains steadfast and unwavering, its methods—or strategies—for implementing this policy are flexible and multifaceted, combining both coercive and conciliatory measures. It is capable of making certain temporary, localized, and superficial concessions in order to achieve its ultimate objectives.

--- Notes

Broadly speaking: prior to the Lugou Bridge Incident, political inducement to surrender was paramount; from Lugou Bridge to the fall of Wuhan, military force took precedence; and since then, political inducement has again become the dominant approach. (3) To appreciate the contrast between the enemy’s unyielding core policy and its adaptable implementation strategies, one need only examine the following evidence:

1. Before the Lugou Bridge Incident—the rigid policy was defined and implemented through the occupation of Manchuria, while diplomatic overtures aimed at inducing surrender were pursued throughout the rest of China. (1)