Why Did Chiang Kai-shek Lose China? The Guomindang Regime And The Victory Of The Chinese Communist Party


Chiang Kai-shek and Mao Zedong in 1945 (via Wikimedia Commons)

“Reports of lost battles swirl in like falling snow,” wrote Chiang Kai-shek at the end of 1948. “North China and the below-the-wall region are on the brink of collapse. I do not feel guilty. I tried my best” (quoted in: Jay Taylor,  The Generalissimo: Chiang Kai-shek and the Struggle for Modern China, 2009, p. 397).

On October 15, when he learnt that the Communists had captured the city of Jinzhou, he still believed that victory was possible. “[T]he enemy is not strong, it should be easy to recover [Jinzhou],” he wrote in his diary (quoted in: Harold M. Tanner, Where Chiang Kai-Shek Lost China: The Liao-Shen Campaign, 1948, 2015, p. 251). He was gravely mistaken.

Communist general Lin Biao crushed Guomindang forces and captured his counterpart, Liao Yaoxiang, who was held as a prisoner of war for 12 years. By the end of October Jinzhou had been irreparably lost, the Sixtieth and New Seventh Armies in Changchun had rebelled and surrendered, and a total of thirty-two divisions had been annihilated in half a month. Chiang characterized the military debacle as “the greatest defeat and the greatest shame” of his life (ibid., p. 261).

Chiang Kai-shek had ruled China with an iron fist for twenty-one years. The disastrous Liaoshen campaign marked the end of his hopes to defeat Mao Zedong’s Communists. For two years he had been thinking about a tactical retreat. The fall of Manchuria convinced him that the only option for the survival of the government of the Republic of China (ROC) was to withdraw to Taiwan (Taylor 2009, p. 397).

By mid-January 1949 the air force and navy headquarters had been transferred to Taiwan. In the following months five-sixths of the thousands of remaining aircraft and the best equipment were moved to the island, too. The ports of southern China were crowded with government officials and civilians desperate to board any available vessel to follow the collapsing regime into its exile (ibid., p. 398).

One night in the middle of January Chiang Ching-kuo, Chiang Kai-shek’s son, and a group of officials raided the Shanghai headquarters of the Bank of China, forcing its president, Yu Hongzhun, to open the vaults. The soldiers began loading trucks with gold bullion, silver coins and foreign currency, which were later shipped to Taiwan, as were thousands of artifacts Guomindang officials had removed from the Palace Museum in Beijing (then called Beiping, “Northern Peace”) (ibid., p. 399).

The Communists entered Beijing on January 31. They crossed the Yangtze River without opposition on 20 April, 1949, as Guomindang forces fled or defected. Nanjing, the capital of the Guomindang regime, fell three days later (Jonathan Fenby, Generalissimo: Chiang Kai-shek and the China He Lost, Chapter 26). Shanghai was taken on May 26. On October 1, Mao Zedong, whose portrait now hung over the gate of the Forbidden City instead of Chiang’s, proclaimed the founding of the People’s Republic of China (PRC).

People's Liberation Army enters Beiping

Communist troops enter Beijing, 31 January 1949 (uploaded by Aukingluntom at Chinese Wikipedia)

On 8 December, the Executive Yuan of the ROC voted to move the capital of the Republic of China from Nanjing to Taipei. On the 10th, Chiang Kai-shek boarded a plane headed for Taiwan. When he arrived, he went to a hotel with his son Chiang Ching-kuo. There he received the news that Yunnan Province had fallen. He sat silently for one hour, deep in thought (ibid.).

The most powerful man in China, who only a few years earlier had sat at the victors’ table alongside British Prime Minister Winston Churchill and US President F.D. Roosevelt, and who as late as 1946 enjoyed so much popular support that the majority of the citizens identified him and his Guomindang (Chinese Nationalist Party) with the Chinese state itself (Taylor 2009, p. 367), had been defeated and humiliated. But how did he lose China to the Communists? Why did his regime collapse?

In this article we shall attempt to answer this question by examining six inherent weaknesses of the Guomindang state and how they were exploited by the Communists to overthrow it.

1) Inability To Reform; 2) Corruption; 3) Factionalism; 4) Economic Backwardness; 5) Political Oppression; 6) International Isolation.

1 – Inability To Reform

“The Chinese revolution has failed,” Chiang Kai-shek said in 1932. “My only desire today is to restore the revolutionary spirit that the Chinese Kuomintang [=Guomindang] had in 1924” (quoted in: Lloyd E. Eastman, The Abortive Revolution. China Under Nationalist Rule, 1927-1937, 1990, p. 1).

The Guomindang was founded on August 25th, 1912, by the revolutionary leader Sun Yat-sen. He had been elected first President of the Republic of China after the 1911 Xinhai Revolution that overthrew the Qing Dynasty. Sun’s vision was to modernize China both politically and economically. In his Three Principles of the Peoples, he sought to adapt to Chinese circumstances three major elements of Western thought: nationalism, democracy and socialism.

But China’s first democratically elected government was ousted by general Yuan Shikai in 1912, and after his death in 1916 the central government collapsed, leading to the emergence of regional military despots (the warlords).

When he became the leader of the Guomindang in 1925, Chiang launched the so-called Northern Expedition, a military campaign aimed at defeating the warlords and unifying China. The Expedition was completed in 1927, and a new central government was established in Nanjing.

The Guomindang had risen to power by promising sweeping social and economic reforms. Soon after its military triumph, however, the regime lost its momentum and institutional inertia set in. Despite some attempts at modernization, which we will discuss later, the regime became increasingly preoccupied with maintaining its hold on power, with preserving the status quo and fighting against radical forces, such as Communism.

In a report to the League of Nations Ludwik Rajchman, the director of the Health Organization and later founder of UNICEF, wrote that the Guomindang government “soon began to lose its original driving force; eventually after two years of office, little remained of the early schemes of reconstruction; the top-heavy machine of the Central Government was clogged by the defensive attitude of those holding doggedly on to official positions, and real incentive to reform and reconstruction passed more and more into the camp of Opposition” (quoted in: Eastman 1990, p. 2).

Clarence E. Gauss, US Consul and later Ambassador to China, wrote in September 1934: “The revolutionary zealots now nestle in the comfort of public office and concern themselves less with the public responsibilities and the welfare and progress of their country and people, and more with their personal fortunes and jealousies” (ibid.).

The bureaucratic maladministration which the Guomindang inherited from the Qing Dynasty and the warlord era remained unchanged. The new state was slow and inefficient. Nepotism was rampant. Government offices were overstaffed with people who didn’t seem to have much work to do. According to Tianjin-based newspaper Ta Kung-Pao, the offices in the capital Nanjing made the impression of “gossip cafes” where idle bureaucrats spent their day “reading the papers, smoking and chatting away the time” (ibid., p. 9).

A contemporary observer recalled that a document arriving at a provincial government office was transmitted through thirty-seven steps. Replies could be received after half a year, and it wasn’t rare for documents to be simply lost in some bureaucrat’s desk drawer (ibid., p. 12).

Only a small number of civil servants were appointed through examinations, a method which Sun Yat-sen had advocated. Rather, getting a job in the administration in most cases depended on personal connections with influential people (ibid., pp. 10-11).

In 1944 Brooks Atkinson, The New York Times war correspondent in China, described the Guomindang government as a “moribund antidemocratic regime … that has become increasingly unpopular and distrusted in China, that maintains three secret police services and concentration camps for political prisoners, that stifles free speech, and resists democratic forces.” Atkinson noted that Chiang Kai-shek’s autocracy had “remained fundamentally unchanged over a long period of time” and had become “bureaucratic, inefficient, and corrupt” (quoted in: Gunther Stein, The Challenge of Red China, 1945, p. 377).


2 – Corruption

Corruption, defined as the “illegal appropriation of public resources for private purposes”, plagued the Guomindang regime from the very beginning (Eastman 1990, p. 14). Officials who before 1927 had been poor suddenly enriched themselves. They built beautiful residences in the capital, spent “long weekends” in the modern, Westernized city of Shanghai, and their children were driven to school in limousines (ibid., p. 16).

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Corruption is very difficult to quantify. It is possible that contemporaries exaggerated its extent and pervasiveness. But it is a fact that most people perceived the government as corrupt. Many people thought that corruption was the regime’s greatest weakness and that it was one of the reasons for the success of Communism (ibid., p. 17).

During the Second World War Yan Xishan, the warlord of Shanxi, told German journalist Guenther Stein:

The reason why the Communists today have such powerful forces is that so many people are following them. And the reason why so many people are following them is that our administration, the administration of the National Government, is bad. We have to blame ourselves for the present situation with regard to the Communists (Stein 1945, p. 44).

Chiang Kai-shek himself acknowledged that his government was deeply corrupt. “[Officials] increase miscellaneous taxes without end, and corruption and extortion have become a common practice, causing the government to become rotten,” Chiang complained in 1933 (Eastman 1990, p. 17).

The self-deprecating statements by the Guomindang leader show that he was aware of the weakness of his regime. Yet while he understood the situation, he was either unwilling or unable to effectively solve the problem.

Government attempts to crack down on corruption were met with failure and public ridicule. One infamous example was the Control Yuan, an agency that was supposed to monitor the other branches of government. Between 1931 – the year it was founded – and 1937, the Control Yuan received complaints involving 69,500 officials. Of these only 1,800 persons were indicted. Moreover, because the Control Yuan could not itself mete out punishments but only refer the indictments to other agencies, the bureaucratic quagmire worked in favour of corrupt officials. Only 268 individuals were found guilty and 214 were punished (ibid., p. 18).

Another example of Chiang Kai-shek’s corruption was his reliance on criminal syndicates such as the Green Gang (read: The Green Gang, Chiang Kai-shek, and the Republic of China).


Portrait of Chiang Kai-shek in Tiananmen Square (Kuomintang Archives via Wikimedia Commons)


3 – Factionalism

Although Chiang Kai-shek ruled China as a dictator he was far less powerful than one might imagine, and he certainly did not create a totalitarian regime like Mao would do after 1949.

Chiang’s party, the Guomindang, was “a loosely knit organization with an exceedingly disparate membership” (Eastman 1990, p. 2). While the Communists had a radical agenda that did not allow for ideological compromise, the Guomindang was a “national party” in its broadest sense. It claimed to represent all groups of society and admitted to its ranks anyone who would support it, even individuals who opposed Chiang himself. As a result, the Guomindang was divided into various factions propagating different ideas and defending different interests.

It was said that Sun Yat-sen never turned down anybody who applied for party membership (ibid.). Some complained that the Guomindang was too concerned with quantity and neglected quality. From 1926 to 1929, the number of party members rose from 150,000 to 630,000. Little attention was paid to their honesty and political ideology. Many people simply joined because they thought this would open up new and promising career opportunities (ibid., p. 4).

The “revolutionary faction”, made up of individuals like Wang Jingwei, Hu Hanmin and Cai Yuanpei, believed that the Guomindang should vigorously implement Sun Yat-sen’s ideas. They were disillusioned with the slackening pace of reform, with the loss of revolutionary spirit and with Chiang Kai-shek’s obsession with fighting against the Communists. They criticized the party’s shift towards conservatism after 1927 and opposed Chiang (ibid., p. 2).

Another faction was composed of old-style militarists and bureaucrats. This was perhaps the most damaging group within the Guomindang (ibid., p. 5). During the Northern Expedition, Chiang Kai-shek had readily co-opted warlords and bureaucrats willing to switch sides and pledge allegiance to his government. Warlords were allowed to join the Guomindang and even to continue to command their own troops if they swore an oath of loyalty to the party (James E. Sheridan, China in Disintegration. The Republican Era in Chinese History, 1912-1949, 1977, p. 183).

The purpose of this strategy was to shorten the duration of the Northern Expedition and to consolidate power quickly. But the long-term price that Chiang’s regime had to pay was enormous.

On the one hand, the mindset, corruption and malpractices of the old warlord regimes and of the imperial mandarinate were simply taken over by the Guomindang state. That created institutional inertia, hindering the reform agenda.

On the other hand, warlordism was perpetuated, albeit in a different form. As a consequence, the Guomindang did not break with the ways of the past. Although unified in theory, in practice China was still divided among military leaders, each of whom had his own sphere of influence.

Chiang Kai-shek controlled the lower Yangtze Valley and Nanjing, Shanghai, the provinces of Zhejiang, Anhui, Jiangsu and Jiangxi.

Warlord Feng Yuxiang ruled over Gansu, Shaanxi, and in theory Shandong (but the Japanese dominated the province economically and politically).

Yan Xishan controlled the provinces of Shanxi, Suiyuan, and Hebei.

Zhang Xueliang dominated Manchuria.

The “Guangxi clique” led by Li Zongren and Bai Chongxi controlled Guangxi and had influence over Guangdong and Hubei (see Sheridan 1977, pp. 183-184).

The rich and populous province of Guangdong was ruled by Chen Jitang.

Hunan was governed by He Jian.

Fujian Province was controlled by small warlords.

Sheng Shicai seized power in Xinjiang in 1933 and pursued a pro-Soviet policy. Perhaps thinking that the USSR would be defeated by Hitler and that Soviet economic help would stop, in 1940 Sheng switched allegiance to Chiang Kai-shek. When he realized that Germany was going to lose the war, he tried to ingratiate himself with Stalin again, but to no avail.

Ningxia, Xikang, Qinghai, Yunnan, Guizhou, Sichuan and Chahar, too, were de facto independent from the central government in Nanjing (ibid., pp. 183-201).

Numerous wars and political intrigues characterized the Republic of China during the Guomindang era. For example, in 1930 Chiang Kai-shek was forced to defend his regime against Guomindang regional warlords in what is known as the Central Plains War.

The existence of rivalling centres of authority weakened the Chiang regime, contributing to the inefficiency of the administration. Between 1927 and 1937 there were at least 27 major revolts, such as the Fujian rebellion of 1933-34, and many more lesser uprisings (Eastman 1990, pp. 85-86).

In 1936 Chiang Kai-shek was even kidnapped and detained by Guomindang generals Zhang Xueliang and Yang Hucheng in order to force him to accept an anti-Japanese coalition with the Communists (the so-called Xi’an Incident).

The Nanjing government was so incapable of controlling the whole country that in 1929 the treasury received no revenues from Hunan, Hubei, Guangdong, Guangxi, Shaanxi, Gansu, Henan, Shanxi, Suiyuan, Sichuan, Yunnan, Guizhou and Manchuria (Sheridan 1977, p. 203).

It is evident that the “reunification of China” during the Northern Expedition was a myth. Although the Guomindang was now the supreme political party in the country, warlordism continued. Chiang Kai-shek was no Mao Zedong. He never succeeded in building a totalitarian state, at least not until he retreated to Taiwan in 1949 (see Taylor 2009, p. 411).

During the Second World War, German journalist Gunther Stein travelled to Shanxi Province and interviewed the local warlord, the aforementioned Yan Xishan.

This is how Stein described the encounter and the situation he found in the province:

One of the first things we were told was, “The Kuomintang [Guomindang] has no real authority here; the party and its Youth Corps exist only nominally; they are free to establish themselves anywhere in our areas but are given to understand that it is better for them not to do so.”

There were no Kuomintang party flags anywhere, none of the usual pictures of Chiang Kai-shek and Sun Yat-sen; and none of the official Kuomintang rites were observed at the public meetings we attended. Old Yen’s own picture in marshal’s uniform dominated the scene.

Yen Hsi-shan [Yan Xishan]  has his own currency, discreetly called “co-operative certificates.” He raises heavy taxes according to his own ideas. The gendarmerie in his area is entirely his own, like his troops. His military and civilian officers are … appointed exclusively by himself.

“Have the Communists been expanding into Kuomintang regions recently?” I asked.

“It is true that they have slowed down in their expansion. And the demand of Chungking [the Guomindang war capital after the fall of Nanjing to the Japanese] that the Communists should withdraw from their present Border Region in North Shensi is unreasonable. But nobody is sure that the Communists have definitely abandoned their policy of force-for the future.

“Look at me,” he said. “Why does the Government allow me to do what I am doing ? Why does it let me and some other provincial leaders in China have a certain amount of force and power of our own? Why are none of the officers under me and none of my civilian officials sent by the Government in Chungking? Why can I collect my own taxes?

“And, why, in spite of that, do I get from Chungking regular monthly cash payments for the wages of my troops, special payment for their uniforms, and a large quantity of food as well as bullets–all of which the Communists don’t get?

“Why all this? Simply because the Government knows that I do not want to overthrow it by force although I am also critical of the Government and frequently send my criticisms to Chungking. This shows the Government that I want to help it improve but that I don’t want to overthrow it.” 

(Stein 1945, pp. 42- 44)

4 – Economic Backwardness

In the mid-1930s China’s economy was still predominantly agrarian. Agriculture made up around 65% of gross national product (GNP), while industry accounted for just about 2.2% of GNP.

Some contemporaries viewed the Republic of China under Guomindang rule as a step forward towards modernization. In 1932 New Zealand economist J.G. Condliffe praised the role of the government in China’s economic development:

Whatever its failings, the present government has the great virtue of being the first in long centuries to have a constructive, progressive outlook. It is not content to govern and collect taxes but, within the limits of its powers, presses forward with economic reconstruction.

Canton under the revolutionary régime was the first city to feel the impact of these new influences. New broad streets were opened up, public works undertaken, universities established, banks promoted and government activities invigorated. In more recent times, since the government has been established at Nanking, such developments have been largely concentrated in Chekiang, which is to be the “model province.” Hangchow is an excellent advertisement for this policy, but the whole province has benefited (J. B. Condliffe, China To-Day: Economic, 1932, p. 78). 

The Guomindang government indeed achieved some successes. Among its accomplishments were the creation of a Chinese customs union (prior to that there were regional customs), the creation of a national currency and of standardized weights and measures. Between 1927 and 1937 industrial production grew by an average of 6% per year (Eastman 1990, p. 226-227).

However, if we compare the modernization achieved under Guomindang rule in Taiwan after 1949, and China’s economic miracle since the late 1970s, Chiang’s regime clearly failed to lift the country out of poverty and backwardness.

After 1949 the Guomindang government in Taiwan adopted a state-led developmentalist strategy aimed at rapidly modernizing the economy. But in the 1920s and 1930s, the party lacked the vision and the ability to draw up and implement plans for economic development.

The first major weakness of the Guomindang state with respect to economic policy was its overreliance on the military. Chiang Kai-shek was a soldier and he understood little about the economy. His style of governance revolved around military power and neo-Confucian ethics. His chief aim was to fight against his many adversaries – rivalling Guomindang factions and the Communists – and to reform the spirit of his people.

He also didn’t seem to grasp the importance of industry. In 1946 US Ambassador John Leighton Stuart and special envoy George Marshall warned Chiang that China was approaching economic disaster. Chiang dismissed those concerns, saying that China was an agrarian, subsistence society which could fight for years even if the urban economies appeared on the brink of collapse (Taylor 2009, pp. 363-364).

Chiang seemed to believe that the economy had two main purposes: providing sufficient food for the people and funding the military.

In the 1930s budget expenditure was approximately as follows:

60%-80%: military spending and reservicing of loans;

7%-12%: administration of tax-collecting agencies;

8%-13%: bureaucracy and productive undertakings (Eastman 1990, p. 221).

Although the Guomindang did not have a comprehensive developmentalist strategy, its founder Sun Yat-sen had envisioned a series of land reforms and investments in infrastructure that would modernize China. The most important point of his plan was the “equalization of landownership”. He believed that the government should purchase land and distribute it to those in need (Sun Yat-Sen, San Min Chu I: The Three Principles of the People, ed. L. T. Chen, trans. Frank W. Price, 1927, p. 431).

Sun’s second main proposal was to “quickly employ state power to promote industry, use machinery in production, and give employment to the workers of the whole nation” so that China would have a “great, new source of wealth” (ibid., p. 438).

However, after Sun died in 1925 and Chiang Kai-shek seized power, nothing came of the Guomindang’s reform manifesto.

Chiang was concerned with maintaining political stability and consensus. Sun Yat-sen himself had understood the difficulty of implementing his equalization of landownership scheme when he remarked: “As soon as the landowners hear us talking about the land question and equalization of landownership, they are naturally alarmed, just as capitalists are alarmed when they hear people talking about socialism and want to rise up and fight it” (ibid., p. 431).

But while Sun Yat-sen was a moderate reformer willing to challenge vested interests, Chiang Kai-shek was a conservative afraid to alienate wealthy landowners and bitterly opposed to social radicalism. During the civil war, when Guomindang troops recovered territories that had been held by Communists and where land had been expropriated and redistributed, they would confiscate it and restore it to the landlords. Chiang and his party feared social upheaval, viewing sweeping reforms as a step towards a Communist takeover (see Eastman 1990, p. 216).

Militarization, corruption and inefficiency characterized the Chinese economy during the Guomindang era, hampering modernization and development.

An iniquitous tax system, partly inherited from previous decades, unequal land distribution and high interest rates burdened especially the poor and favoured graft.

Income taxes were not high, averaging 10%. Land taxes, however, were levied on three levels: by the central, the provincial and the county government. The main land tax was calculated on the basis of outdated land assessments made during the Qing Dynasty, sometimes dating as far back as 1713 (ibid., pp. 195-196).

During the Northern Expedition the Guomindang authorized a temporary tax called the “Military Reorganization Surcharge”. After the war the surcharge was not repealed, but simply renamed to “Special Surcharge for Reconstruction”. Soon the party realized that surcharges were an easy method to squeeze the people. Surcharges proliferated.

Surcharges included the Surcharge for Self-government, for Education, for County Education, for Free Education, for Welfare Work, for Land Survey etc. Some of the most bizarre surcharges were the Surcharge for the Purchase of Airplanes by the Peasants and the Anti-Insect Surcharge (ibid., pp. 196-197).

The surcharges were so unpopular that the government abolished most of them and decreed that the revenue from the surcharges could not exceed the revenue of the main land tax.

In order to make up for the loss of revenue, local authorities introduced “special land assessments”. Land assessments could happen at any time, leaving peasants no time to plan how to pay. Moreover, officials would often assess land above its legal value, thus pocketing the difference (ibid., pp. 200-201). It was one of the major sources of graft in the period.

One of the most striking flaws of the tax system was the ease with which wealthy landlords could evade taxes, thus shifting tax burdens disproportionately to the poor. Landlords would have their names removed from the tax records; register their land under different or fictitious names; or simply bribe tax collectors. Tax evasion was endemic. For example, by 1932 the central government received only 52% of the assessed land tax of Zhejiang Province (ibid., p. 203).

Apart from income and land taxes, there were also a number of indirect taxes, including the salt tax, tobacco and wine taxes, consolidated taxes (taxes on manufacturing of items such as rolled tobacco, cotton yarn, flour, matches and cement), and the stamp tax (ibid., p. 205).

Peasants not only had to pay direct and indirect taxes, but also provide the army with free labour and recruits. Soldiers often simply confiscated peasants’ food and property. Many railroads were built by forced labour on land that was expropriated by the government without compensation (ibid., pp. 208-210).

The urban economy, the backbone of China’s fledgling industrial sector, was not treated much better. The government regarded the industrialists as a source of money for the military.

The relationship between the Guomindang and the business community was complex. In 1927 Shanghai capitalists donated 10 million yuan to help Chiang Kai-shek suppress the Communists. Such generosity had the adverse effect of awakening the Guomindang’s lust for money. Soon they asked Shanghai companies to subscribe a 30 million yuan loan. When the entrepreneurs refused, the Guomindang resorted to blackmail and extortion (ibid., pp. 228-229).

Government officials went to each business and assigned them a loan: 500,000 yuan to Nanyang Tobacco Company, 300,000 yuan to Sun Sun Department Store, 200,000 to Sincere Department Store and Wing On Department Store.

The son of a wealthy indigo merchant was arrested and charged with “counter-revolution”. He was freed only upon the payment of 500,000 yuan. The 3-year-old son of a manager of the Sincere Company was kidnapped and 500,000 yuan demanded for his release.

Some businesses, like the China Merchants Steamship Navigation Company, were bankrupted by the government’s greed (ibid., p. 229).

Aside from excessive military spending and corruption, the Guomindang failed to pursue policies that could develop Chinese manufacturing. For example, the government tariffs taxed both imports and exports, giving no advantage to Chinese producers. That differed markedly from the Guomindang’s developmentalist policies in Taiwan after 1949, when the party applied the tenets of the “infant industry” argument to economic policy (ibid. 236).

Another weakness of the economy was the banking system. Due to very high interest rates, entrepreneurs were hesitant to take loans, and banks preferred to lend money to the government, which allowed them to make a safe 12%-20% annual return (ibid., p. 237).

The Guomindang’s management of the economy shows one peculiar characteristic of the regime: it had no class basis and no real constituency except for the military and the bureaucracy that lived off government spending.

After the Second World War, the inability of the Guomindang to achieve economic recovery contributed to its demise. In 1946 the government tried to combat inflation by outlawing the selling of gold bullion and foreign currency. It put a ceiling to interest rates, froze wages, set prices for a number of essential goods such as wheat, rice and cooking oil, and supplied government workers in the cities with basic foodstuffs and cloth at fixed prices. These measures worked only for a short time.

Military spending was out of control, according to some sources as high as 90% of the budget. When Chiang demanded a pay rise for the troops, the chairman of the Supreme Economic Council, T.V. Soong, resigned (Taylor 2009, pp. 367-368).

As economic conditions in the cities worsened, labour unrest increased. Yet Communist attempts at recruiting members remained largely unsuccessful. Chiang pressured employers to raise wages, striving to show the working class that the Guomindang, not the Communists, were their true champion (ibid., p. 369).

The biggest problem was hyperinflation. A sack of rice cost 6.7 million yuan in June and 63 million yuan in August. That month the government issued a new currency, the gold yuan. All citizens had to turn over their gold and silver bullion as well as the old currency. The authorities pegged wages to the cost of living, once again froze prices, and rationed industrial material and consumer goods (ibid., p. 386). Nothing worked. By the end of the civil war the economy was on the brink of collapse.


5 – Political Oppression

When Sun Yat-sen founded the Guomindang, he believed that China should become democratic. In 1913 the party seized power not by force but through elections in which it won a majority of the seats. Those were the first elections ever held in China.

Sun Yat-sen was a reformer who had been inspired by the government of the United States. In The Three Principles of the People, he wrote:

China now is in a period of revolution. We are advocating a democratic form of government. Our ideas of democracy have come from the West … The people control the government through the suffrage, the recall, the initiative, and the referendum; the government works for the people through its legislative, judicial, executive, civil examination, and censoring departments. With these nine powers in operation and preserving a balance, the problem of democracy will truly be solved and the government will have a definite course to follow (Sun 1927, pp. 333; 355).

However, in 1913 Yuan Shikai staged a coup d’etat and outlawed the Guomindang. After Yuan’s death the country was dominated by rivalling warlords. Sun Yat-sen became convinced that China wasn’t ripe for democracy and that the Guomindang must build up an army, defeat the warlords and establish a temporary dictatorial rule in order to educate the people in how democracy functions.

Sun turned to Soviet Russia for help. He admired the strength and organization of the Russian Communist Party, which had overthrown a monarchical regime and established a new government.

With the assistance of Soviet experts, the Guomindang was reorganized according to Leninist principles. Although Sun rejected the radicalism of the Marxist doctrine, he now thought that dictatorial rule was necessary to prepare China for democracy.

In Outline of National Reconstruction (1924), Sun explained:

The reconstruction program will be divided into three periods: (1) the period of military dictatorship, (2) the period of political tutelage, and (3) the period of constitutional government …

During the period of military dictatorship, all political machinery will be placed under the direct control of the military government. The Government, in order to bring about national unification, will, on the one hand, overcome internal discord by military force, and on the other hand, endeavor to wake up the people through propaganda …

When a province has been completely brought within military control, the period of political tutelage begins and the period of military dictatorship ends …

When the majority of the provinces in the country have reached the period of constitutional government, that is, when these provinces have secured effective local self- government, a People’s Conference will be held to consider, promulgate, and adopt the constitution … 

The promulgation of the national constitution will end the third period, that is, the period of constitutional government. A national general election will be held in accordance with the provisions of the constitution. The People’s Government will be dissolved three months after the national election; and its powers will be handed over to the government elected by the people themselves (quoted in: Leonard Shihlien Hsü, comp., Sun Yat-Sen, His Political and Social Ideals, 1933, pp. 85-89). 

Sun Yat-sen was a democrat and the objective of the Guomindang was to implement democracy. In this respect, dictatorship was a means and not an end in itself. However, Sun’s belief in the ability of the Guomindang to successfully transition from dictatorship to democracy proved to be overly optimistic, if not naive.

When Chiang Kai-shek took over the party leadership and completed the Northern Expedition, very little was done to carry out Sun’s democratic vision. As a career soldier, Chiang was a militarist obsessed with power. He was afraid of loosening the grip of the party on society.

As a result, the period of political tutelage became a one-party dictatorship that lasted from 1927 to 1949 in mainland China and from 1945 to the late 1980s in Taiwan.

In 1928 the Guomindang government passed an Organic Law which provided that the National Government should exercise all the governing powers of the Republic of China, including the supreme command of all forces, the right to declare and end war, to grant amnesties, and to restore civic rights (Harley Farnsworth Macnair, China in Revolution: An Analysis of Politics and Militarism under the Republic, 1931, pp. 141-142). All opposition parties were outlawed. In 1931 the government adopted a Provisional Constitution that enshrined the concept of political tutelage into law.

The oppression of political rivals was not as absolute as it would be under Mao’s rule. But the thuggish and brutal methods of the regime alienated large sections of society and provided fuel for Communist propaganda.

Popular discontent grew as assassinations, arbitrary arrests and summary executions became increasingly frequent. In December 1934 Ta Kung-Pao wrote: “The youth suspect that the government is not good, and you then come with fetters and handcuffs, and prove that the government is no good” (see Eastman 1990, p. 24).

Leftist intellectuals and politicians were persecuted. Zhan Dabei, a left-leaning member of the Guomindang, was executed in 1927. Xiang Zhongfa, a Communist leader, was executed in 1931. On January 17, 1931, Hu Yepin, a leftist writer and the husband of female novelist Ding Ling, was arrested alongside other Communist activists by the British police and turned over to the Guomindang authorities. They were machine-gunned the following month. Author Mu Shiying was allegedly shot by Guomindang agents in Shanghai in 1949. These are just a few examples of the government’s repression of political rivals.

After the Second World War, the ways of the Guomindang regime remained unchanged. In 1947 Chiang cracked down on students who were staging anti-government protests. The government banned three newspapers and arbitrarily arrested students as “ringleaders” (Taylor 2009, p. 374). In Wuhan students stopped a police van carrying away five university professors. The police fired, killing three people through dormitory windows. Parents of students applied for writs of habeas corpus. Chiang backed down, releasing almost all students. Although the suppression of civil rights was much more severe in the Communist-controlled areas, cases of abuse of power by the Guomindang damaged its reputation and were propaganda victories for the Communists (ibid., p. 375).

Censorship also contributed to popular discontent. Censorship had begun during the anti-leftist purges of 1927, but it was only in December 1930 that the government adopted a Press Law which imposed systematic restrictions on free speech (Eastman 1990, p. 25).

Article 19 of the Press Law proscribed publications that attacked the Guomindang and its principles, harmed the interests of the nation, endangered public peace and order, or were prejudicial to good morals (ibid., p. 26).

Between 1929 and 1936, 458 literary works were banned, often because they advocated class struggle, slandered the authorities or were categorized as “proletarian literature”. Banned authors included Bertrand Russell, Gorkij and Upton Sinclair. During the first ten years of Guomindang rule, over 1,800 books and journals were prohibited (ibid.).

However, censorship wasn’t as pervasive or effective as it would later be under Communist rule. The reason lies in the fact that Chiang Kai-shek’s regime did not exercise control over the whole country. As we have seen, China was still largely divided into spheres of influence, and the ability of the Nanjing censorship to reach areas outside of Chiang’s direct control were very limited.

For instance, publications in Guangdong or northern China could criticize the Nanjing authorities with impunity, as long as they did not attack their own local warlords. Another obstacle to government censorship was the existence of foreign concessions, where Western and Japanese authorities decided what could or could not be published (ibid., p. 28).


6 – International Isolation

In July 1947 US President Truman sent General Albert Coady Wedemeyer, who had served as Chiang Kai-shek’s Chief of Staff commanding American forces during World War II, back to China to analyze the situation and submit proposals on how to deal with the regime. Wedemeyer travelled in the country for a month, interviewing officials and common citizens.

At the end of his trip, Wedemeyer addressed a meeting of the State Council attended by all Guomindang ministers, Chiang Kai-shek and US Ambassador Stuart. To the surprise of his hosts, Wedemeyer launched a scathing critique of the regime’s corruption and maladministration. He said that the Guomindang would not be able to defeat the Communists if it did not first improve China’s political and economic conditions.

Some Guomindang members were offended at the envoy’s bluntness. Others, however, cried because they knew he had told the truth. In his diary Chiang Kai-shek wrote that he deserved criticism, but he complained that the US had “no clear China policy” (Taylor 2009, p. 377).

Despite the internal weakness of Chiang’s regime, international isolation was a major factor in its downfall. While the Chinese Communists enjoyed the financial and military aid of the Soviet Union, and while they pursued a relentless anti-government propaganda that exploited social problems and political grievances, the Guomindang had in the United States not only a lukewarm, but also a critical ally, who lambasted the shortcomings and human rights violations of Chiang’s regime.

The main strategy of the United States in the immediate post-war period was to bring about a compromise between the Guomindang and the Communists. When these attempts failed, Washington’s position became ambiguous and indecisive.

On January 8, 1947, before leaving China to assume the office of Secretary of State, George Marshall asked Ambassador Stuart for his opinion on the future China policy of the US. Stuart said that there were three options: to give the Guomindang assistance on conditions that it reformed the government; to remain passive; to withdraw from China altogether. Stuart said that he preferred the first alternative. But he added that he would rather choose the third over the second.

Stuart feared that if the US did nothing, all sections of Chinese public opinion would turn against Washington: “The government leaders would charge us with desertion, the Communists with partisanship, and the intellectuals, speaking for the helpless masses, with imperialistic intrusion,” he said. Stuart called the Guomindang a “rotten government”, which the US could not just support if it did not reform itself (Tang Tsou, America’s Failure in China, 1941-50, 1963, p. 441).

In early 1947 the US started to partially withdraw from China, and in April 1948 it passed the China Aid Act which provided “a sum not to exceed $338 million” to the Guomindang regime. Secretary of State Dean Acheson later recalled that the US government chose not to provide unlimited aid at a time when such intervention would have been the last chance to significantly alter the outcome of the civil war (ibid., p. 443).

On January 1949, the Communists took Beiping (Beijing) and replaced Chiang’s portrait hanging over the gate of the Forbidden City with Mao Zedong’s. As Ambassador Stuart was telling Guomindang general Li Zongren that the US would not help the crumbling regime, trains loaded with Soviet military equipment regularly crossed the northern Chinese border into the Communist-controlled areas (Taylor 2009, p. 403).

The Soviet Union and the Chinese Communist Party (CCP) also launched a concerted propaganda and disinformation campaign aimed at swaying American and international public opinion. Moscow sought to cover up its close ties with the CCP. Communists were told to refer to the CCP as “a democratic party” of Chinese farmers and “agrarian reformers”, thus obfuscating their role in Stalin’s strategic plan of Soviet expansion.

Both Moscow and the CCP attacked the Guomindang in order to further tarnish its reputation as the legitimate government of China (Anthony Kubek, How the Far East Was Lost: American Policy and the Creation of Communist China, 1941-1949, 1963, p. 222).



The root causes of the Guomindang’s downfall are to be found in the structural deficiencies of the system of government it established in 1927 and which it was never able to correct. Although these flaws were not sufficient to bring about its collapse, the anti-Japanese war and the civil war against the Communists further weakened the credibility and reputation of the regime, depriving it of its last basis of popular support.

The Communists could point to the failures of the Guomindang regime during twenty years of one-party rule. Every flaw was magnified and exploited for the purposes of anti-government propaganda.

However, as Frank Dikotter explained in his book The Tragedy of Liberation, many Chinese would later come to realize that the Communists’ policies were far more oppressive and economically disastrous than those of the Guomindang regime.

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