Wang Ch'ing-wei, in this period, feared war and grasped at the conciliation which the Japanese offered between successive invasions. In 1937, Wang worked for the localization of the war at the cost of North China, on the theory that the Japanese could take what they wished. He reiterated his old point that the Chinese could not possibly whip the Japanese on the fields of battle, but that they might outmaneuver them over the tables of diplomacy. The advent of war was a disappointment and source of worry to him. In the course of the celebrated retreat from Nanking to Hankow, and from Hankow to Chungking, Wang lost no opportunity to work for peace. When the Germans offered themselves as intermediaries in the Hankow period, Wang sought the opening of negotiations. There was a violent uproar in the People's Political Council, not then reported in the press. When the government moved to Chungking, Wang was even more despondent: victory seemed remote, the Communists worried him as much as did the Japanese, and the Generalissimo swept opposition aside with the slogans of resistance. Like other peoples in war time, the Chinese began to confuse peace and treason. Wang and his closest supporters felt that they were being deprived of freedom of speech; their known inclination to surrender and negotiate had supplied Chiang with a weapon which might even prove personally dangerous to them. The death by firing-squad of General Han Fu-ch'u showed that treason, or the charge of it, had become serious. Wang and his followers rationalized their own fearfulness concerning the war into the belief that they were expressing the will of the peace-loving masses. In December 1938 he got out of China by a surprise flight to Indo-China. His followers had previously been filtering down to Hong Kong. The Konoye statement,[8] just issued, gave him an opening to treat with the Japanese. [Footnote 8: Statement of the Japanese Prime Minister, Prince Fumimaro Konoye, December 22, 1938, Jones and Myers, _Documents on American Foreign Relations, 1939-40_, Boston (World Peace Foundation), p. 299.] Throughout the negotiations, Wang behaved as though he were himself the legitimate Chinese government. He did not accept the minimum Japanese conditions, but held out for an agreement which would preserve the fictions of Chinese independence, allow him to fly the national flag, establish his version of the Kuomintang, and attempt every kind of linkage with the past. One of his followers asked the author in Nanking, "Do you think we were traitors when we spent more than a year getting a fair peace agreement from the Japanese?" This agreement, released by Messrs. Tao and Kao, consisted of the cession of broad military, foreign-relations, and economic rights over China to Japan. The Chinese were to lose no territory _pro forma_, and were to keep a minimum of 35 per cent interest in major economic enterprises.