With war in Europe appearing imminent, Premier Wu Youping had assumed his work would lean more towards war-related economics. However, starting from the beginning of 1939, Wu Youping found that his most troublesome issue was actually population migration.

By 1938, China's urban resident population had broken through the 200 million mark. Furthermore, with a massive number of junior high school students graduating, the urban population was increasing by more than 20 million annually. China's birth numbers for that year were only 13.71 million; the gap of over 7 million came entirely from the countryside.

This wave of rural population loss had begun in 1935. In many rural areas with better land conditions and convenient transportation, large numbers of junior high graduates were not staying in the countryside. They either went to county seats for high school or entered the cities directly to work. Their parents were already working in towns during the farming off-season or participating in large-scale infrastructure projects. This led to a concentration of population towards cities at an astonishing speed in areas close to urban centers.

To compensate for the loss of agricultural population, the state began migrating people from deep mountains and old forests to mountainous regions, moving people from mountainous regions to the plains, and consolidating villages into townships in the plains.

Considering only the migration to areas more suitable for production, the scale of this population transfer was around 36 million, which was already equivalent to the population of Britain or France. If the entire population migration across China were counted, it involved the movement of 120 to 150 million people.

As Premier, Wu Youping did not manage the specific details, but he had to consider the employment problem for these 120 million people while planning their migration. Many of these 120 million were not yet of working age or lacked the ability to work. Even so, 60 million jobs had to be provided.

At a plenary session of the State Council, facing hundreds of leaders from across the country, Wu Youping offered neither criticism nor agitation, but simply stated pragmatically: "Comrades, Europe took over a hundred years to transform 120 million agricultural population into an industrial population. We are to complete the first phase of this in three years. The scale and degree of effort required for this are far greater than fighting a world war.

"The first phase of our revolution was to fully restore China's sovereignty and, through asset restructuring, transform the nearly bankrupt Chinese economy. The work of the first phase has been completed.

"The second phase of our revolution was to restore normal trade relations with the world, and through the introduction of foreign capital and technology, rapidly develop China's industrial system, allowing China to enter industrialization. The work of the second phase has been basically completed.

"Now we are proceeding with the third phase. This involves a comprehensive transformation of China, changing it from an agricultural country into an industrial one. The beginning of the third phase is the planning of China's population layout. Work on this phase has now entered a critical stage.

"The areas where migration is easy are those where the masses already had a demand to join industrial mass production, so they joined the migration naturally. The areas where work has encountered resistance are not because the masses there are deliberately opposing us. To deliberately oppose us, one must at least have the level of understanding to comprehend the strategic significance and value of population migration. The masses with such a level of understanding have long since moved into the cities themselves.

"The industrial level in these resistant areas is generally low. In the short term, focus on eliminating the anxiety of the masses; in the long term, focus on strengthening education..."

The leading cadres attending the State Council work conference included leaders from various ministries, provinces, and cities. This group overlapped highly with the Central Committee of the Civilization Party, but not entirely. More than a dozen mayors of foreign nationality attended the meeting. He Rui had once sent an invitation letter to the British economist Keynes, offering to hire him as the Mayor of Hong Kong. Keynes considered it for a time before declining the invitation, but he recommended his proud student, Kahn, to serve as the Mayor of Hong Kong.

Apart from Kahn, the Englishman, the foreign employees within the Chinese government were basically all Japanese. As the economies of China and Japan became increasingly tight-knit, both the Chinese and Japanese governments hired personnel from the other side to work within their own governments. It was just that the number of such people was not large, and it did not trigger any particularly large reaction.

Kahn was thirty-four years old this year, and his time working in China far exceeded his time working in Britain. Accustomed to recording Premier Wu Youping's speech according to Chinese government workflows, Kahn felt great admiration for Wu Youping in his heart. Just as Wu Youping said, Europe took over a hundred years to transform 120 million of its population from agricultural to industrial. China wanted to preliminarily complete such a change within three years; the difficulty could be imagined. How could creating 60 million lifestyles within an industrial society be easy? Britain, known as the world hegemon, found it incredibly difficult to create even 1.5 million jobs. 1.5 million jobs was one-fortieth of 60 million.

Wu Youping's speech was a concluding statement, the final step of the meeting. In the sessions before the Premier made his report, all leaders had made plans for their own work. Initially, they came up with 34 million jobs. Afterward, by squeezing here and scraping there, the provinces barely managed to scrape together 51 million jobs. Subsequently, the provincial leaders successively stated that whoever had the ability should take on the remaining 9 million jobs, as their provinces could not squeeze out even a single additional post.

On the way back to Guangzhou, Kahn lamented inwardly: *This is China, a miraculous country.* 1939 was Kahn's eighth year working in China. In these eight years, he did not know how many times he had lamented like this. But at this moment, Kahn sighed again.

Providing 60 million jobs seemed completely impossible in European eyes, but in China, it might not be impossible. Kahn believed that with China's current development, given five to ten years, this matter could certainly be accomplished. But to complete it within three years, there would definitely be a great many problems.

Upon returning to Guangzhou, the province immediately held a meeting. After two days of meetings, Kahn returned to Hong Kong City. Initially, after arriving in China, Kahn was responsible for establishing the financial centers in Hong Kong and Guangzhou. In 1937, having accumulated enough political achievements, Kahn became the Mayor of Hong Kong. Just as he arrived home, Kahn saw an invitation card for a ball at the British Consulate in Hong Kong. Kahn glanced at it and tossed it directly aside.

The next day, when he arrived at his office, he immediately received a request from the Consul of the British Consulate in Hong Kong to have dinner with him. Kahn thought for a good while before reluctantly agreeing.

Now, all place names in Hong Kong's streets related to the colonial era had been cancelled. The former Victoria Avenue had been renamed People's Avenue. In a restaurant on People's Avenue, Kahn sat at a table with Consul Jim. It was only after eating three courses that Consul Jim opened his mouth to ask, "Mr. Mayor, I wonder if China has any policies at present that differ from before?"

"This kind of matter should be directed to the Chinese Ministry of Foreign Affairs," Kahn replied unhappily. He always felt that the British government viewed him as its agent in China, which was undoubtedly an insult to an economist.

The reason he chose to come to work in China initially was that Kahn's teacher, Keynes, believed Kahn's level of economics could shoulder such responsibility. Moreover, working in China, this super-colossal economy, would be extremely beneficial for Kahn's own professional expertise in economics. There were no such job opportunities in Britain.

All these years, Kahn had worked hard in the capacity of a Chinese civil servant and an economist. To treat a scholar as a spy was the greatest insult. In China's system, the Civilization Party, as the ruling party, was responsible for formulating national policy. The government managed the economy and civil administration; this work was public, containing no secret content or transactions. To obtain information in these fields, one should look at the work reports of various levels of the Chinese government, rather than running to find a mayor.

Seeing Kahn's unhappy expression, Consul Jim hurriedly explained, "Please do not misunderstand. As an elite cultivated by the British Empire, you naturally observe the loyalty due to an elite. My question just now was to ask you, as an economist, whether China, based on economic needs, will adopt policies different from before given the increasingly tense current world situation."

These words represented respect for an economist. Kahn lost his previous unhappiness. He thought for a moment and replied, "Recently, Chairman He Rui wrote a new book titled *Outlook on Future World Economic Development*. I wonder what the British economics community thinks of it?"

Seeing the topic finally get on track, Jim quickly answered, "I personally have read *Outlook on Future World Economic Development*. My view is similar to that of British economists; we all believe China's attitude towards colonies is very unfriendly."

Kahn felt some contempt for the British economics community in his heart. In his new book, He Rui put forward the view that to expand the world market, colonialism should be thrown into the trash heap of history. After the end of the American Civil War, the liberated slaves finally possessed the status of ordinary people. To obtain a better life, they had to work hard and trade with society. Such free people not only created wealth for society and paid taxes to the state but also drove social economic development in many fields.

Colonies that had been exploited clean by the suzerain state not only could not create any wealth, but the suzerain state also had to spend money to maintain the system of exploitation. Kahn had personally gone to Korea for inspection. Reality forced Kahn to admit that although Korea, having thrown off colonial oppression, was still overwhelmingly poor and its economic development was indeed inferior to China and Japan, with fiscal transfers within the East Asian Economic Community and the completion of land reform, the Korean people now did not go hungry, could receive education, and had entered the industrial age.

And the Korean government, under the knowledge services provided by the Chinese economic circles, developed its own industries based on domestic resources and accepted a certain amount of industrial transfer from China and Japan. Now, Korea, with a population of over 30 million, was already an emerging market. If the current development process was not interrupted, in twenty years, Korea would become a country that had preliminarily completed industrialization. An industrialized country with a population of over 30 million was a market worth noting anywhere in the world.

Some unworthy British economists were willing to be running dogs for colonial policy, completely ignoring economic principles to publish remarks that served the government as lackeys, making Kahn extremely disdainful of such people.

Kahn replied, "Mr. Jim, from the reaction I have seen in the academic world, there do not seem to be too many British economists holding such views."

Consul Jim, having been rebuffed like this, did not know how to answer for the moment. He lowered his head to continue attacking the fourth course to temporarily escape the somewhat awkward scene before him.

Kahn naturally knew what the British government was worried about now. If war broke out in Europe, Britain would not only have to contract its military forces back to Europe but also extract resources and manpower from colonies like India to serve the European war. At such a time, if China were to charge into India, the resistance encountered would be very low. Once British India was lost, let alone launching a counterattack to retake India, whether Britain could win the war in Europe would be a major question.

Previously, when studying in Britain, Kahn felt that the British government was the most advanced and intelligent government in the world. Now Kahn no longer saw it that way. When China strongly opposed Nazi Germany's move on Czechoslovakia at the Munich Conference, the British government should have actively cooperated. They could have even hinted that Britain, together with France, would invite the Chinese military to participate in military operations to maintain peace in Europe.

As long as the external force maintaining peace was large enough, Nazi Germany would have to compromise sooner or later. As long as war did not break out within Europe, it would be awkward for China to make a move on British India. In Kahn's view, this was undoubtedly the best policy at present. Yet the British government actually allowed newspapers to incite foolish views suspecting whether China wanted to interfere in Europe's internal affairs. In reality, the moment China and France reached economic cooperation in 1928, China had not merely deeply interfered in Europe's internal affairs, but comprehensively influenced them.

Imperialist Britain, aging and decaying, still dared not admit this fact today, ten years after Sino-French economic cooperation began. It deserved to face its current predicament!

The meal ended in a polite but awkward atmosphere. Kahn was just preparing to go back to work when he heard Consul Jim call out to him from behind. Kahn turned his head to see Consul Jim walk over, grasp Kahn's hand, and say sincerely, "Lord Kahn, you are an Englishman. This will never change."

Sensing the heartfelt anxiety from Consul Jim, Kahn's heart softened. The British government had awarded Kahn a knighthood last year; the British upper class had to address Mayor Kahn as "Lord Kahn," and ordinary British people had to call him "My Lord." But what truly moved Kahn was the expectation for the future in Consul Jim's expression and voice, as well as his expectation for Kahn, his compatriot.

After pondering for a moment, Kahn said, "If China and Britain slide towards the direction of war, I will immediately resign from all duties in China and return to Britain to defend it. But Mr. Consul, isn't the most important thing right now to first determine China's stance?"

After speaking, Kahn released his hand, turned, and left. As a mayor in China, Kahn still had a great deal of work to handle.

On April 30, 1939, the British Ambassador to China and the French Ambassador to China met with Chinese Foreign Minister Li Shiguang together, wanting to determine China's stance. On May 1, an article by He Rui was published in the *National Daily*. In the article, He Rui expressed concern about the situation in Europe. At the same time, he declared once again that China was a peace-loving country, and that now and in the future, China would no longer seek to expand its territory, nor would it seek to acquire colonies.

This article was He Rui's declaration, and countries all over the globe reprinted it. The British Foreign Office naturally studied this article carefully as well. Such a declaration did not possess any binding force, but for Britain at present, it was already the clearest good news they could obtain. At least China had no intention of strategic coordination with Germany.

Entering May, Britain and France, through a series of diplomatic communications with Moscow, gradually made the CPSU understand their meaning. Stalin at this time did not even have the interest to meet with the British Prime Minister and the French Premier, because the view proposed by Britain and France was that if Germany launched a war against Britain and France, the Soviet Union could send troops to attack Germany without violating the sovereignty of neighboring countries.

From a physical perspective, such a request was simply insane. The Soviet Union did not currently border Germany. The Soviet Navy was extremely weak; although at this stage it seemed slightly stronger than China's, China's independently built battleships and aircraft carriers had already completed 83% of their construction according to schedule. By July 1939, the first Chinese self-built battleship and aircraft carrier would be launched and would begin fitting out within a very short time. Adding the four cruisers and nine destroyers already launched, by April 1940, the scale of China's navy would formally surpass the Soviet Navy. If Britain and France were counting on the Soviet Navy to launch an attack on Nazi Germany, they might as well go ask China for help.

As for the army and air force, the Soviet Union temporarily could not think of any way to engage the German army without violating the sovereignty of neighboring countries.

If analyzed from diplomatic rhetoric, the attitude of Britain and France was even more dishonest. Since they wanted the Soviet Union to send troops to fight Germany, Britain and France had to show sincerity and make commitments to the Soviet Union. These commitments could be signing a treaty with the Soviet Union stating that if the Soviet Union were attacked by Germany, Britain and France would immediately declare war on Germany. Or they could promise that the Soviet Union could recover the territories lost after the Great War in Europe, and only after recovering these territories could it border Germany.

Britain and France, however, explicitly stated that they did not accept any changes to the borderlines between the Soviet Union and its neighboring countries. The reason was actually that the Munich Agreement had caused very terrible effects, and Britain and France could no longer accept such things continuing to happen. Essentially, Britain and France had poked a hole in the sky themselves, and now they wanted the Soviet Union to help them wipe their asses. For a moment, Stalin could not quite figure out if Britain and France were playing the fool or if they had truly been driven mad by the situation before them.

General Secretary Stalin did not have that much time to ponder the laughable proposal from Britain and France. The group of CPSU Politburo members coming for the meeting arrived quickly. Although Kirov was considered a moderate, as soon as this meeting began, Kirov said, "According to the reaction from the Southwest Military District, Comrade Tukhachevsky's military views have become extremely opportunistic and have caused a very vile influence on the construction of the Red Army..."

This passage already expressed Kirov's total negation of Tukhachevsky. According to Soviet tradition, after Kirov finished speaking, several Soviet Red Army military leaders immediately followed up by opening fire on Tukhachevsky, fiercely attacking his military concepts.

The key points singled out for criticism included but were not limited to: Tukhachevsky only valued offense and completely ignored defense. So much so that under the training tactics developed according to Tukhachevsky's military theory, many new units of the Soviet Red Army did not even know how to dig trenches.

By Soviet tradition, such accusations would be somewhat exaggerated. How could troops really not know how to dig trenches if asked to do so? However, the current Soviet Red Army had not conducted trench training, so the trenches dug would probably be called "ditches," let alone possessing the technical content of modern trenches. There was even a huge regression compared to the trench construction level of Russia during the Great War in Europe.

Subsequent criticism of Tukhachevsky turned to other levels. The Soviet Red Army Tukhachevsky wanted to build was a fully mechanized army. The Soviet Union had already begun an even more ambitious Third Five-Year Plan, but even if the Third Five-Year Plan was over-fulfilled, the Soviet Union did not have the capacity to build a fully mechanized army of six million troops.

And Tukhachevsky himself, disregarding the friendly reminders of comrades within the Party, willfully pushed his plan. This led to a large number of Soviet Red Army troops receiving so-called mechanized training on paper, yet remaining unable to receive the equipment described on paper for a long time. Tukhachevsky, meanwhile, ordered the army to engage in agricultural production and did not switch to infantry combat training in accordance with the Soviet reality.

This statement could be said to be half true and half false. The Soviet Union indeed did not have the capacity to produce equipment for a fully mechanized force of six million. However, sending troops to engage in agricultural production was just a routine action. The Soviet Union's current level of agricultural mechanization was low, and large amounts of manpower were needed during the harvest. It was not that Tukhachevsky deliberately made the army engage in agricultural production to prevent them from conducting infantry training.

Soviet tractor factories also had tank production lines. Since a large number of skilled workers went to build tanks, it naturally squeezed the production schedule of tractors. While this was certainly because the Soviet Union indeed wanted to build a mechanized Red Army, a major reason lay in the fact that although the Soviet Union imported a large amount of light industrial goods from China, heavy industry was placed in the primary position in the Soviet Five-Year Plan. Importing a large number of sedans and tractors from China as consumer goods was one thing, but if even tractors had to be imported in large quantities from China, neither Stalin nor the Soviet leaders who firmly supported the Five-Year Plan were willing to accept it.

At this time, Tukhachevsky no longer had the will to oppose. He knew that after Kirov opened fire, his fate had been decided. Fortunately, after listening to the barrage, the final evaluation of Tukhachevsky was "military adventurism," "unrealistic," and other such evaluations of internal contradictions. No one suggested that Tukhachevsky was the ringleader of a conspiratorial anti-Party clique.

Tukhachevsky looked at Stalin very unhappily but did not refute. In this struggle over military lines, Tukhachevsky had failed. Next, Tukhachevsky and the group of Soviet generals who supported his military concepts would be kicked out of the army.

Just as Tukhachevsky expected, two marshals, eight colonel generals, dozens of generals, and hundreds of colonels, headed by him, were dismissed. Some of them were prosecuted for crimes of corruption. The radical mechanized construction of the Soviet army was braked. The Soviet armored units that had already received equipment continued to study and train for mechanized warfare after fiercely criticizing Tukhachevsky's erroneous concepts. According to the new plan, Red Army units that could not obtain mechanized equipment in the short term were all converted to infantry divisions. The entire Soviet Red Army began systematic training for defensive warfare.

Seeing his own efforts suffer such a severe setback, Tukhachevsky could only sulk in the small room where he was confined. Stalin, having resolved this matter, sent Molotov to China to ask about China's views on the European war.

If the European situation remained peaceful, Stalin actually did not mind giving Tukhachevsky a bit more time to wait for the equipment to be fully allocated. However, war was imminent, and the Soviet Union truly had no time to keep waiting. What the Soviet Union needed most right now was an army that could immediately be thrown into fierce warfare, not that powerful future army existing in Tukhachevsky's imagination.

Molotov did not speak up for Tukhachevsky this time either. He, a People's Commissar for Foreign Affairs, naturally could not interfere in domestic military construction. Moreover, Molotov agreed very much with the internal summary following the criticism of Tukhachevsky.

1. The current regulations of the People's Commissariat for Defense approved by the government in 1934 are outdated, do not conform to the existing structure, and cannot reflect the contemporary tasks shouldered by the People's Commissariat for Defense. The newly established departments—Red Army Headquarters, Department of Military Technology Supply, Department of Supply, Department of Food, Transport and Clothing Supply, Department of Firearms and Mortars, Department of Higher Military Academies, Department of Fuel Supply, and Infantry Command—all exist according to provisional regulations. Other departments (General Staff, Department of Artillery, Department of Communications, Department of Barracks Construction, and Department of Inspection) have also been adjusted, and the regulations regarding these adjustments have not yet been approved.

There are 34 existing independent departments (bureaus), yet there is no clear distinction of responsibilities between Deputy People's Commissars. This situation frequently affects the resolution of problems in various departments (bureaus) of the People's Commissariat for Defense.

2. There are nearly 1,080 types of current regulations, manuals, and codes for the troops. Among them, basic orders—Field Regulations, Internal Service Regulations, Disciplinary Regulations, and Combat Regulations for certain arms—are outdated and need fundamental revision. There is a lack of command manuals for large formations (armies), manuals for attack and defense of fortified regions, and manuals for mountain warfare.

3. Most units have temporary establishments that have not been approved by the People's Commissar. Establishment and equipment management are chaotic. Nearly 1,400 types of establishment tables and equipment standard tables, on which troop life and supply are based, have not been approved by anyone, yet they are issued and implemented as current codes.

4. The problem of systematizing military legislation and orders of the People's Commissar for Defense has not been straightened out. Many orders need to be cancelled or modified because they are outdated and bring difficulties to commanding troops.

5. Supervision over the execution of orders and decisions issued by the government is weak. Effective leadership is lacking for troop instructions. On-the-spot inspection has not been executed as a system, having been replaced by collecting written reports.

...

Molotov believed that as for whether Tukhachevsky worked hard when responsible for Soviet army construction, he certainly worked hard. But war was about to break out, and the problems of the Soviet Red Army were so serious that even Molotov, someone who did not understand military affairs, felt a sense of powerlessness after seeing this summary report.

The regular army of the Soviet Red Army was a mess, and the situation of the reserves was even worse. At a time like this, if someone had to take responsibility, it definitely had to be Tukhachevsky, the person in charge!

On the plane, Molotov recalled the Chinese army he had seen. As a diplomat who did not understand military affairs, Molotov could not come up with any cases to prove the combat effectiveness of the Chinese National Defense Force. What could be determined now was only that China was building ships on a large scale; at least China would have the capacity to conduct large-scale naval warfare in a few years. As for the Chinese military's naval warfare capability, Molotov could not make a judgment.

After meeting He Rui, Molotov first asked, "Mr. Chairman, the third phase of non-deployment of troops on the Sino-Soviet border will begin next year. The Soviet Union is ready to implement the agreement."

"Please inform Mr. Stalin that China is ready to fulfill the agreement," He Rui replied.

Seeing that He Rui did not mention the outbreak of war at all, Molotov roughly judged that He Rui perhaps had no intention of immediately entering the war. The third phase of non-deployment of troops on the Sino-Soviet border was based on the development of aircraft and armored forces, which led to a greatly increased speed of offense. Therefore, China and the Soviet Union would not deploy troops within 300 kilometers of the border line and would regularly inspect each other's troop deployments. When work on this phase was completed, the border line of over ten thousand kilometers between China and the Soviet Union would become a vast security zone.

From a national perspective, border police forces holding only light weapons, as well as military forces inspecting smuggling, were at most paramilitary organizations. Such police forces inevitably had to be deployed at the border, and such forces lacked assault capabilities and could not pose a real threat.

So Molotov asked, "If war breaks out during the start period, will it affect China's fulfillment of the agreement?"