China is the land that still employs manual labor for production and has not yet entered the first stage of industrial evolution, while in Europe and America the second stage is already reached. So China has to begin the two stages of industrial evolution at once by adopting the machinery as well as the nationalization of production. In this case China will require machinery for her vast agriculture, machinery for her rich mines, machinery for the building of her innumerable factories, machinery for her extensive transportation systems and machinery for all her public utilities. Let us see how this new demand for machinery will help in the readjustment of war industries. The workshops that turn out cannon can easily be made to turn out steam rollers for the construction of roads in China. The workshops that turn out tanks can be made to turn out trucks for the transportation of the raw materials that are lying everywhere in China. And all sorts of warring machinery can be converted into peaceful tools for the general development of China's latent wealth. The Chinese people will welcome the development of our country's resources provided that it can be kept out of Mandarin corruption and ensure the mutual benefit of China and of the countries coöperating with us. It might be feared by some people in Europe and America that the development of China by war machinery, war organization and technical experts might create unfavorable competition to foreign industries. I, therefore, propose a scheme to develop a new market in China big enough both for her own products and for products from foreign countries. The scheme will be along the following lines: I. The Development of a Communications System. (a) 100,000 miles of Railways. (b) 1,000,000 miles of Macadam Roads. (c) Improvement of Existing Canals. (1) Hangchow-Tientsin Canals. (2) Sikiang-Yangtze Canals. (d) Construction of New Canals. (1) Liaoho-Sunghwakiang Canal. (2) Others to be projected. (e) River Conservancy. (1) To regulate the Embankments and Channel of the Yangtze River from Hankow to the Sea thus facilitating Ocean-going Ships to reach that port at all seasons. (2) To regulate the Hoangho Embankments and Channel to prevent floods. (3) To regulate the Sikiang. (4) To regulate the Hwaiho. (5) To regulate various other rivers. (f) The Construction of more Telegraph Lines and Telephone and Wireless Systems all over the Country. II. The Development of Commercial Harbors. (a) Three largest Ocean Ports with future capacity equalling New York Harbor to be constructed in North, Central and South China. (b) Various small Commercial and Fishing Harbors to be constructed along the Coast.