1.  The Chinese Government declare that China will not in future pledge the taxes, other than customs and salt revenue of that part of Eastern Inner Mongolia under the jurisdiction of South Manchuria and Jehol Intendency, as security for raising a foreign loan.

2.  The Chinese Government declare that China will herself provide funds for building the railways in the part of Eastern Inner Mongolia under the jurisdiction of South Manchuria and the Jehol Intendency; if foreign capital is required, China will negotiate with Japanese capitalists first, provided this does not conflict with agreements already concluded with other Powers.

The Chinese Government agree, in the interest of trade and for the residence of foreigners, to open by China herself certain suitable places in that part of Eastern Inner Mongolia under the jurisdiction of South Manchurian and the Jehol Intendency, as Commercial Marts.

The regulations for the said Commercial Marts will be made in accordance with those of other Commercial Marts opened by China herself.

GROUP III

The relations between Japan and the Hanyehping Company being very intimate, if the said Company comes to an agreement with the Japanese capitalists for co-operation, the Chinese Government shall forthwith give their consent thereto.  The Chinese Government further declare that China will not convert the company into a state enterprise, not confiscate it, nor cause it to borrow and use foreign capital other than Japanese.

Letter to be addressed by the Japanese Minister to the Chinese Minister of Foreign Affairs.

Excellency:  I have the honour to state that a report has reached me that the Chinese Government have given permission to foreign nations to construct, on the coast of Fukien Province, dock-yards, coaling stations for military use, naval bases and other establishments for military purposes; and further, that the Chinese Government are borrowing foreign capital for putting up the above-mentioned constructions or establishments.  I shall be much obliged if the Chinese Government will inform me whether or not these reports are well founded in fact.

Reply to be addressed by the Chinese Minister of Foreign Affairs to the Japanese Minister.

Excellency:  I have the honour to acknowledge the receipt of your Excellency’s Note of ...  In reply I beg to state that the Chinese Government have not given permission to foreign Powers to construct, on the coast of Fukien Province, dock-yards, coaling stations for military use, naval bases or other establishments for military purposes; nor do they contemplate to borrow foreign capital for putting up such constructions or establishments.