When Neville Chamberlain became prime minister on 28 May 1937, he ushered in a new phase of the ‘deterrence’ period. As the British leader, he was in a position to implement the changes in strategic foreign policy that he had long advocated. Not for him the uncertainty of the previous four years. He revelled in ‘the wonderful power that the Premiership gives you’. ‘As Ch[ancellor] of Ex[chequer]’, he boasted to his sister in a typically hubristic letter, ‘I could hardly have moved a pebble; now I have only to raise a finger & the whole face of Europe is changed.’ The relative lull in events – the German Anschluss with Austria on 13 March 1938 was the only major international occurrence until the Czechoslovakian crisis in September of that same year – should have provided him with the opportunity to do major facial surgery. However, circumstances were not entirely propitious for many of the prime minister's pet schemes.

In the Far East, the outbreak of Sino-Japanese hostilities was compounded by the Japanese wounding of Hughe Knatchbull-Hugessen, the British ambassador to China, and the ensuing British pursuit of a Japanese apology. This meant that Chamberlain could not overtly seek a Anglo-Japanese rapprochement. Instead, he had to content himself with an attempt to bring an end to hostilities while simultaneously ensuring that British interests in China were not overrun by the Japanese.