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From this island, with a good navy, any power almost might be exerted over the North and South China Seas, and over the Pacific highways from Hong Kong to Australia, Panama, Nicaragua, San Francisco, Vancouver, Japan, Shanghai. All these are in fairly close proximity to Formosa, and the Shanghai route to Hong Kong actually runs between the island and the China mainland.

There remain still two or three more facts which must not be neglected in order to obtain a fair view of this important question.

(a) It is a fine post for any offensive attack upon China, and also a stronghold for an attack upon the British power in the Pacific. If fortified and defended by a navy from any other power, Formosa would prove a great rival to Hong Kong, which would lose at least half of its importance, commercially and strategically, and which has already been somewhat weakened by the French occupation of Cochin China, in 1882.^[23]

(b) In case of Asiatic complications, England would naturally expect reinforcements from Australia, and from the mother country by the Canadian Pacific Railway, but after they arrive at Vancouver, and are on transport, they will be at the mercy either of Japan or the occupier, whoever it may be, of Formosa. Even the Bismarckian policy re New Guinea would be broken down, i.e., all commercial and strategical communication between Hong Kong and Australia would be seriously incommoded by the occupation of Formosa.