The situation in the International Settlement itself remains unchanged. The Hongkew area has not yet been returned to the control of the Shanghai Municipal Council. The situation in the western area beyond the Settlement boundary has given rise to some anxiety, owing to a difference of opinion between the Chinese Special Municipal Government of Shanghai, supported by the local Japanese authorities, and the Municipal Council about the policing of the extra-settlement roads. Negotiations are now in progress between the Municipal Council and the Chinese municipality with a view to arriving at some modus vivendi.