Starting in 1931 with the seizure of Manchuria, Japan had a policy of attempting to reduce Chinese independence with an ultimate aim of placing all of China within the Japanese sphere of influence.

Realising that the only hope of inducing Japan to moderate these activities lay in an Anglo-American joint front, Britain proposed that a number of times, but was always rebuffed by Washington".

[3] German Foreign Minister Konstantin von Neurath, who was attempting to mediate a compromise peace between China and Japan and Germany, which had friendly relations with both Japan and China and did not wish to choose between them, complained upon seeing Konoe's peace terms that they were so intentionally outrageous and humiliating demands that they seemed to be designed only to inspire rejection by Chiang.

[9] The summer offensive of 1938 succeeded in taking Wuhan, but the Japanese failed to destroy the core of the Chinese National Revolutionary Army, which retreated further up the Yangtze.

[13] However, the refusal of the Japanese to give Wang any real power discredited his government as a puppet regime in the eyes of the vast majority of the Chinese people.

[14] Between August 1937 and October 1941, Bureau of Investigation and Statistics agents were responsible for about 150 assassinations of Chinese collaborators and 40 Japanese officers in Shanghai alone.

[15] Undercover agents tended to be young men, who graduated from provincial schools, rather than universities (the ultraconservative Dai was contemptuous of intellectuals, who he felt to have been exposed to too much Western influence for their own good) and were usually skilled in martial arts.

By 1938, the Chinese government was caught in a "scissors crisis" between the enormous expenditure required to fight the war and a rapidly-plummeting tax base.

[14] Faced with a lack of funds to continue the war, Chiang started to engage in increasing desperate measures to raise revenue such as organising sales of opium via Macau and Hong Kong in an operation overseen by Dai and Du.

[19] The guarantees allowed British banks to lend China some £5 million, a step that the Japanese government publicly denounced as a "frontal attack" on the "New Order" in Asia that Japan wanted to build.

On April 9, 1939 Cheng Hsi-keng, the manager of the Japanese-owned Federal Reserve Bank of North China, was assassinated by Chinese nationalists at Tientsin's Grand Theatre.

[24] Once the four men returned to British custody, Madame Soong Mei-ling, the wife of Chiang Kai-shek admitted to the British Ambassador in Chongqing, Sir Archibald Clark-Kerr that the accused assassins were Chinese operatives involved in resistance work and lobbied Clark-Kerr to prevent the accused being returned and executed by the Japanese.

[25] The local British consul, Mr. Jamieson, had not kept London well-informed on the details of the case, especially the fact that he had promised the Japanese that he would hand over the accused assassins.

[26] The British Foreign Secretary, Lord Halifax, hearing that the confessions had been obtained by torture, ordered that the accused assassins should not be handed back to the Japanese.

[25] By 1939, the Japanese had largely persuaded themselves that it was British economic support that was keeping China going and that a confrontation with Britain was needed to bring matters to a head.

[29] As the Kriegsmarine was several years away from being ready for a war with Britain (the Z plan, which Hitler endorsed in January 1939, called for a Kriegsmarine ready for war with the Royal Navy by 1944), German Foreign Minister Joachim von Ribbentrop wanted an alliance with a strong naval power like Japan as the best compensation for Germany's naval weakness.

[31] On 16 June 1939, the British Foreign Office in a press statement stated that the acceptance of the Japanese demands would "mean the abandonment under the threats of force of the policy His Majesty's Government has pursued in the past, which is the same as that of the other Great Powers with interests in the Far East".

[34] The stories about the public strip searches led to a flood of "Yellow Peril" stereotypes being widely invoked in the British media.

In addition, Chamberlain faced strong pressure from the French not to weaken British naval strength in the Mediterranean because of the danger of Benito Mussolini's Italy honouring the Pact of Steel if war broke out in Europe.

[37] The Pact of Steel signed in Rome in May 1939 was an offensive-defensive German-Italian alliance, which meant there was a real possibility that if war with Germany began, Italy would join.

[42] On 26 July 1939, the United States gave the six-month notification that it would not renew the 1911 Treaty of Commerce and Navigation, which increased the amount of economic pressure the British could bring against Japan.

[42] Shiratori advised that Japan should agree to the German request made in November 1938 to convert the Anti-Comintern Pact into an anti-British military alliance.

[44] From Berlin, the very pro-German Japanese ambassador, General Hiroshi Ōshima, likewise advised that Japan would sign a military alliance with Germany and Italy as the best way to resolve the crisis in its favour.

[44] On 24 July 1939, Heinrich Georg Stahmer, who was in charge of Asian relations at the Dienststelle Ribbentrop, met with Ōshima to tell him that Ribbentrop had not heard from the Japanese since he presented his proposals for a military alliance on 16 June 1939 and informed him that Adolf Hitler was a preparing a major speech on foreign policy at the planned NSDAP rally in Nuremberg for September.

[46] The main fear was the British "peace front" that was meant to contain Germany in Europe would soon come into being, forcing Japan to fight an alliance of Britain, France, and the Soviet Union that might be joined by the United States.

[46] Itagaki, through his deputy Machijiri Kazumotō, the chief of the Military Affairs Bureau, sent letters to the German ambassador, General Eugen Ott, and the Italian ambassador, Giacinto Auriti: "The Army has made every effort to obtain a favorable decision on the pact at the Five Ministers Conference of August 8, but no progress has been made since Japan's proposal of June 5.

[40] Though Craigie knew that the dispatch of the British battle fleet had been ruled out, he often implied during his talks with the Japanese that Britain would go to war to end the blockade.

[52] The handover of the four Chinese to the Japanese sparked much outrage in Britain, with MPs being flooded with letter of protests from their constituents, a public relations disaster for the Chamberlain government that the Israeli historian Aron Shai observed would now be better remembered if the Second World War Two had not begun two weeks later.

[54] The Tientsin incident highlighted the gap between the foreign policy of Japan's civilian government, as expressed through the Japanese ambassador to Britain, Mamoru Shigemitsu, who attempted to defuse the situation through negotiation, and the Japanese Army, the commander of the North China Army, Field Marshal Hajime Sugiyama, escalating the situation by demands for an end to the foreign concessions in Tientsin altogether.

The British historian D.C. Watt argued that the partial diplomatic victory by the Japanese helped to keep Japan neutral during the first year of World War II.