There is one thing that makes me rather anxious and that is whether London, in collaboration with Canberra, is thinking out our future policy with regard to this country. It is, of course, generally agreed that under present conditions, with a more or less hostile Ministry and an alliance with our enemies, it is out of the question to do business, but lately there have been indications that things might change, and it would be very essential that, if this did happen, we should be ready to talk very promptly. A good many people agree that what the Japanese want above all is to bring the war in China to some sort of more or less satisfactory end, and it seems to me that we cannot afford to be too idealistic, and that if we could win the Japanese from a hostile to a friendly attitude it would be worth bringing pressure to bear on China to come to a satisfactory agreement. Japan must have some room to trade and develop, and the natural area is surely China. China, on the other hand, must have assistance in developing itself, and we probably must accept the fact that such assistance might primarily be Japanese. Thinking the matter out very roughly, it seems to me that what we should insist on is a recognition of the independence of China less no doubt Manchuria, which for good or evil is, I assume, established as a vassal state of Japan. Once the independence of China is recognised, I think we should recognise that Japan has special rights and interests there, and that the Chinese should look to Japan for help and assistance. Japan, of course, should give undertakings that this will be fairly given, and that the present policy of ill-treatment of the Chinese and elimination of all other foreign interests should cease. What I think we must resist are the views of the idealists that Japan is altogether evil and China is altogether good, and that the former must be punished and the latter must be given all the good things possible.
So much for our possible dealings with a friendly Government here, but I have my anxieties about our immediate policy with an unfriendly Government. I sense a feeling in certain quarters of irritation with the Japanese leading to a policy of pin pricks and of checking them at every point. Such people might like to see us making protests and feeble attempts at resistance in French Indo- China. I have the gravest doubts about the wisdom of this. Thanks to their ineptitude and weakness, the French for the time being have lost Indo-China to the Japanese, and we have to accept this until such time as we have dealt with Germany and our hands are strong and free to deal with Japan. In these circumstances, it is no use making protests which we cannot back up and which only serve to aggravate the Japanese. Our policy must be one of pure opportunism, and if the gradual economic absorption of French Indo-China may occupy Japan for some months that may be the best thing which could happen from our point of view. No doubt it brings the threat to Singapore nearer but, as we are not strong enough to prevent it, we just have to suffer it. Of course, if the Americans were prepared to take a strong attitude about Indo- China, the situation might be different, but all the information I can obtain is to the effect that the Americans are not prepared to do so, though they would react fiercely to an attack on Singapore and probably the Netherlands East Indies.
The above is all rather vague, but I would like to have your reactions to it and to hear what Mr. Bruce  thinks about it.
What I feel we must resist in the future is that spirit of idealism in certain quarters in the Foreign Office which has existed in the past and been responsible for a certain amount of the trouble we are in to-day.
Our main complaint here is lack of news from Australia. The Department's attitude seems to be to cast us out into the unknown and to leave us to carry on as best we can.