European historians, when studying the history of the 1930s, consider 1935 to be the first peak of the British policy of appeasement. First was the naval armament treaty signed on June 18, 1935. The total tonnage of German naval vessels was not to exceed 35% of the total tonnage of the Commonwealth naval vessels as stipulated by the Washington Naval Treaty and the London Naval Treaty. Regarding submarines, Germany guaranteed that its submarine tonnage would not exceed 45% of the Commonwealth's total.

Another event was the *Sino-Dutch Armistice Agreement* signed on December 12, 1935, and the *Sino-British Friendship Treaty* signed on December 24.

China and the Netherlands announced a ceasefire. The Netherlands ceded Borneo, Sulawesi, the Natuna Islands, and the Maluku Islands to China. The Netherlands and China agreed to allow each other's banks to conduct comprehensive financial business, including personal deposits, in both countries.

China and Britain established a Western Pacific security system based on Britain retaining control of shipping lanes. A series of financial measures, including currency exchange between the two sides, strengthened trade between China and Britain.

In 1936, China and Britain signed an investment agreement in the financial sector. China allowed Britain to invest and issue bonds in the upcoming Shanghai and Guangzhou financial markets.

The *Sino-British Friendship Treaty* stipulated that upon its entry into force, Sino-German military cooperation must cease. The Chinese side complied with the agreement and sent a large number of German military exchange groups in China back to Germany. However, this agreement did not stipulate that China could not fulfill agreements reached with Germany prior to the signing of the *Sino-British Friendship Treaty*.

The Little Mustache was very smart. Aside from not anticipating the Soviet Union's war potential, the strategic and tactical considerations he displayed before 1942 in history reached the level of a genius. It was impossible for him not to understand what a diesel-electric hybrid submarine with a submerged displacement of 2,200 tons meant. This was the crystallization of the blood and sweat of Chinese and German naval and engineering personnel. With a surface range of up to 13,000 nautical miles and equipped with rotating sonar arrays, these sea killers could silently monitor any vessel moving on the surface.

When China asked Germany if they still wanted to go through with this deal, the Little Mustache asked a question in return: how did China plan to deliver these ships to Germany? The simplest method would be to go through Malacca, pass the Suez Canal, cross the Mediterranean, go through the Strait of Gibraltar and the English Channel, and then arrive at German ports. Submarines cannot travel entirely submerged; they need to surface for routine operations. If they took this route, the British and French along the way would likely dare to immediately dispatch navies to intercept this submarine fleet.

Another route was simpler: depart from China, go north through the Bering Sea, and take the Arctic route. This route was too affected by the climate, though the good thing was that after passing the Soviet Union, they could return to Germany all the way from the North Sea. The bad part was that the Soviet Union would definitely know that China and Germany were jointly developing submarine technology, and they would request to import this technology from China.

Of course, there was another solution that could more easily get rid of the dependence on the Strait of Malacca. After the new Standing Committee of the Politburo was elected, they agreed to the solution proposed by Chen Ke.

In January 1936, a Chinese special envoy went to visit the Siamese government.

In 1936, there were only five independent Asian countries in Asia: China, Japan, Korea, Siam, and Iran. The rest were colonies belonging to Europeans or puppet states. Although Siam maintained its independence, it was tightly controlled by Britain. King Rama VII of Siam announced his abdication in Britain in 1935, passing the throne to King Rama VIII. The Seventh King lived in Britain, while the Eighth King was studying in Switzerland. The Siamese regime was responsible to three regents.

The Chinese side decided to use a rather "unorthodox" method to solve the Siam problem. The special envoy proposed a land lease request to the Siamese regents. This included leasing over a thousand square kilometers of land, including the Kra Isthmus, for a period of 25 years. That area was mountainous and faced Chinese-controlled Cambodia across the sea. To the east was a large plain, quite suitable for planting coconuts and oil palms. The mountainous areas could also produce many cash crops. The Chinese special envoy expressed willingness to develop the land in this area.

The regents did not understand what China wanted to do. Then, the Chinese special envoy "softly" raised the issue of land demarcation between China's Laos Province and Siam. Back when Britain and France were resolving colonial conflicts, France had taken a bit of a loss on land demarcation. Quite a bit of land that had belonged to China's Laos Province "since ancient times" was now within the borders of Siam. The Chinese special envoy believed that Siam needed to make some friendly gestures. For example, allowing China to develop these lands and build factories like oil refineries. If there wasn't even this minimum friendly gesture, China would have to consider the issue of "territory since ancient times."

The three Siamese regents all knew about China building oil refineries in Cambodia. If oil tankers did not bypass Malacca but instead a pipeline was built at the Kra Isthmus, a massive amount of transport capacity could be saved. China's oil transport fleet would only be used for transport between the western end of the Kra Isthmus pipeline and the Middle East, while the eastern end of the pipeline would only require a very short distance to travel between the refinery and the oil terminal.

The benefits China promised Siam were significant, including helping Siam build a domestic railway network and an inland river transport network. After the railway construction was completed, it would be managed by Siam itself; China would only provide technical assistance and would not participate in operating revenues. For river transport, the Siamese would have to pay to buy ships themselves.

The Siamese side knew that China had already signed a friendship agreement with Britain and also possessed army forces that overwhelmed Britain. Siam could not afford to offend Britain, nor could it afford to offend China. Under the Chinese special envoy's tactics of combining soft and hard measures, the Siamese regents first communicated with Britain and then signed this agreement with China. The agreement allowed China to "solely invest in and construct engineering projects related to oil transportation."

On March 1, 1936, the agreement was signed. On March 4, a transport fleet set sail from Cambodia and arrived near the Kra Isthmus to begin unloading engineering equipment and personnel. By June, when the ship carrying the members of the Chinese delegation to the Berlin Summer Olympics passed through the Strait of Malacca, the exploration work by Chinese engineering troops running through this area was basically completed, and trial excavation work had fully unfolded. On August 1, 1936, the day the Berlin Olympics officially opened, China also officially finalized the excavation route for the Kra Canal and began construction.

Digging the Kra Canal was an old tune for Siam. During the reign of King Rama V of the Bangkok Dynasty, King Chulalongkorn, who was a king who strongly advocated reform, had visited Europe to introduce advanced Western science and technology to Thailand. At that time, the international shipping industry had already reached a considerable scale, so the concept of digging the Kra Canal to make the shipping route between the Pacific and Indian Oceans convenient came into being. However, at that time, international cooperation on mega-projects was not yet in fashion, and Thailand's strength alone was by no means up to the task. What followed was World War I, where the major powers fought until flesh and blood flew, and they were simply unable to implement such a huge project.

Once the Kra Canal is opened, the voyage between the Pacific and Indian Oceans will be shortened by at least about 1,200 kilometers, and large ships can save 2 to 5 days. This is undoubtedly a great thing for countries whose shipping relies heavily on the Strait of Malacca.

China's reasons were indeed very sufficient. Currently, for the tens of millions of tons of oil transported from the Middle East annually, having the Kra Canal would immediately lower costs significantly. The goods China sold to the Indian Ocean region annually could also lower transportation costs through the Kra Canal. This was a huge benefit for China, and also meant a huge loss for Britain. From China's geographical position, after having the Kra Canal, China would have no need to go through the Strait of Malacca, and the British would not receive any toll money. If a war broke out, the Chinese fleet could also go directly through the Kra Canal, completely bypassing the blockade of the Strait of Malacca. This meant that the British management of Malacca for hundreds of years would come to naught.

The Chinese side was very clear that Britain could not agree to the excavation of such a canal. Even if Britain were brought in as a shareholder, Britain would not agree. Since that was the case, certain small tricks had to be brought to the table.

The determined Kra Canal route was 81 kilometers long, 400 meters wide, and 25 meters deep. It was a two-way navigation canal cutting across the Kra Isthmus in southern Thailand. Although the project had to pass through the Luang Mountains and construction difficulty was high, the good thing was that the mountainous area was sparsely populated. China could just block off the leased land and stall for time.

Negotiating with the British was absolutely impossible; the British never bought that. Since the British were the type who refused to be led and had to be dragged backward, China's attitude was very clear: create a fait accompli, and then push forward subsequent matters around the fait accompli. To build this project, the Chinese side mobilized 6 engineering corps-level units, totaling 180,000 engineering troops.

Chen Ke was very clear about how much profit there would be after the completion of the Kra Canal. In the 21st century, large ships passing through the Kra Canal could save 2 to 5 days, saving nearly 300,000 US dollars per voyage. According to China's demand for oil in the 21st century, at least over a thousand large oil tankers would pass through the Kra Canal annually. Just on oil transportation alone, over 300 million US dollars in costs could be saved a year. And this is not to mention China's other shipping. Over decades, the saved costs would be a massive figure.

For this purpose, China was willing to use both coaxing and trickery to get the Kra Canal project. Moreover, the means by which the United States got the Panama Canal were absolutely not honorable, yet didn't that canal, which had a huge promoting effect on world shipping, still become an object of admiration for later generations? This world is very practical.

China had made up its mind to dig the Kra Canal, and Germany's 1936 Berlin Summer Olympics were also being held with extraordinary excitement. The torch relay was a method invented by the Little Mustache. From the perspective of a conservative artist, this method was actually quite good. Regarding the person of the Little Mustache, Chen Ke once thought he was a racist, but many historical materials did not support this view.

First was the Jewish issue. In the German Army, Navy, and Air Force, there were over 150,000 people of Jewish, half-Jewish, and quarter-Jewish descent serving. Among them, there was one at the Field Marshal level and as many as dozens at the General level!

Air Force Marshal Göring also protected famous scientists with Jewish blood. Once, he told Hitler that the famous chemist and entrepreneur Arthur Imhausen was half-Jewish and asked for Hitler's help. After hearing this, Hitler said that if he really had so many major discoveries in the scientific field, we should declare him an Aryan. The next day, Göring notified Imhausen: due to his outstanding contributions in the scientific field, Hitler had announced him to be an Aryan.

A large number of officers at all levels in the Army, Navy, and Air Force were shielding their subordinates and friends with Jewish blood. If one were to say this was just a move by the German Wehrmacht, then Heydrich of the Nazi Party had a nose characteristic of Jews—one look and you'd think Jewish blood. Yet historical records indicate that the highly favored Heydrich, had he not died at the hands of Czechoslovakian paratroopers, would very likely have become Hitler's designated successor.

Heydrich, this buddy, made it to SS-Obergruppenführer and General of Police, and was a thorn in Himmler's side. If having Jewish blood determined one's fate in the Third Reich, Heydrich would have been finished long ago.

As for the members of the German SS, who ranged from wearing Cossack fur hats to Turkish turbans, one couldn't see how strictly they insisted on bloodlines either. In the days when Germany was sailing smoothly, SS chief Himmler even believed that the next supreme commander of the SS might not be a German, or even possibly not an Aryan.

This was the status quo of Germany. Various demands from all sides were gathered together, finally unified under the banner of the law of the jungle and external expansion, exhibiting a bizarre drama. The core point of this force led by the Little Mustache was that the strong are kings, so the Little Mustache wanted to make peace with Britain when holding the advantage, while simultaneously fearing US intervention in the war. They were extremely hostile to the Slavs, whom they viewed as an inferior race. Generally speaking, they lacked long-term strategy.

In addition, the Little Mustache was of commoner origin after all. The Nazi Party represented populist grass-roots, and was in a constant state of struggle with the Wehrmacht, an organization with countless ties to the Junkers. In this situation, which side China should stand on required very subtle maneuvering. China would absolutely not ally with the Little Mustache, nor would it support that bunch of idiots in the German Wehrmacht.

Since the Little Mustache was a smart man, the special envoy sent to Germany was Wu Xiangyu, whose intelligence was absolutely not below that of the Little Mustache. Before leaving, Chen Ke instructed Wu Xiangyu: never, ever try to get the Little Mustache drunk. In the Republic of China era, the Kuomintang's dumbass diplomats met with the Little Mustache. The Little Mustache naturally looked down on those spineless bastards, and his words were naturally not very polite.

That fool felt he had lost face, and knowing the Little Mustache had a low alcohol tolerance, insisted on clinking glasses with him. The Little Mustache couldn't possibly deliberately show weakness, so he had to drain the glass. In the end, the Little Mustache was drunk quite badly. This was even considered a "success" of Republic of China diplomacy. Chen Ke was sure Wu Xiangyu would absolutely not do such a stupid thing, but Comrade Wu Xiangyu's alcohol capacity was too great. If he wanted to show politeness and casually downed a glass, the Little Mustache would have to risk his life to keep the gentleman company. The matter would turn out unbeautifully.

Wu Xiangyu naturally understood Chen Ke's meaning. One of the disciplines of the People's Party was that forcing people to drink was absolutely prohibited. First, Chen Ke particularly hated this bad habit; second, in these years the people had become wealthy and could really afford to drink. So Chen Ke had issued this ban early on.

Just as Chen Ke expected, the Little Mustache warmly hosted the Chinese special envoy and head of the sports delegation, Wu Xiangyu. The talks between the two sides went straight to the main topic: the future strategic relationship between China and Germany.