Correspondence on difficulties in negotiating with Southern Government without antagonising Northern; Japanese opposition to levying Washington surtaxes; reports of dissension within the Nationalist Government following the failure of the Government to establish a new capital, and riots in Hankow directed against the Finance Minister T. V. Soong; rejection of Clementi's proposals to annexe the New Territories; details of the defence of the foreign Concessions; reports on the economic situation in Canton and Hong Kong; police reports on frontier incidents in the New Territories; Clementi's disapproval of the British Government's agreement to the levying of the Washington surtaxes and the surrender of Hankow; negotiations with Eugene Chen over the Hankow Concession; Russian and German arms for China; the Canton Government's threat to take over the Customs Administration if the Inspector General of the Chinese Maritime Customs attempted to collect the new surtaxes; criticisms by O'Malley of the Foreign Office's policy of neutrality towards China; the success of Chiang Kai-shek in the civil war; deteriorating situation in Shanghai.

Correspondents include L.S. Amery, Sir Miles Lampson, O'Malley, and the Consul General at Shanghai.