This day brings some good news and bad news.
First, the good news.◊
Overall, the Funding Committe is pleased with our efforts thus far, though Free China would like us to step up activity in their area.
The bad news, however, is very bad indeed. Neo-Japan has signed a co-operation agreement with the Alien forces, and withdrawn from X-Com.
Due to this, I am instituting a new policy for all X-Com recruiters; namely, that all Neo-Japanese citizens are hereby blacklisted from employment with X-Com due to their government's collusion with Alien forces, and those currently employed will be redacted from current pay and duty rosters and detained in secure facilities elsewhere.
It may be a harsh attitude to take, but I think we all remember what happened at EuroCOM during the First Alien War.
One good thing did come of Neo-Japan's withdrawal, though - shortly after the Neo-Japanese government announced its withdrawal from the project, X-Com agents in Free China intercepted a series of coded transmissions between Neo-Japanese military vessels and an unidentified party located in the South China Sea. From these transmissions, they were able to discover the location of an Alien colony. It's in the South China Sea, between Free China and Neo-Japan.◊
(Now that I think about it, the presence of this colony could explain why Free China's not particularly happy with us right now - with a known hostile force in the area and a former ally providing aid to said force, I'd be worried too. In fact, I am - but I digress.)
We're not quite prepared to hit the colony just yet, but we'll be taking it out during the coming month. It'll be a quick strike: get in, blow the colony's command center, and get out, never mind any loot or corpses.