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Republic of China - 1937-1949

During the war against the Japanese from 1937 to 1945, Chiang was China's generalissimo. The leaders of the KMT had been hoping that the Japanese aggressors would stop before they went too far. The Japanese had been urging them to join in "mutual defence against the Communists," and the KMT leaders had been ready to succumb to their wiles. However, the facts showed that the purpose of the Japanese invasion was to take over the whole of China. If that happened, it would be a death blow not only for the Chinese nation but for themselves. They had no choice but to change their tune and accept the proposal of the CPC and other Chinese patriots that they work together to resist Japan.

President Franklin Roosevelt responded with a series of boycotts and froze Japan's American assets, since America was ill equipped for war. Meanwhile the United States provided Chiang's forces with financial aid. Once the United States declared war following Japan's attack on Pearl Harbor, American advisors and aid flowed more steadily into China.

While the Nationalists and Communists at first cooperated against Japan, they soon split. Lead by Mao Tse-tung, the Communists proved very effective at gaining the support of China's millions of peasants. The Nationalists, occupied at war's end with repatriating almost three million Japanese and blamed by many for an economy devastated by war, were very unpopular. The war with the Japanese weakened Chiang's forces and corruption eroded his government's legitimacy.

In 1945 China emerged from the war nominally a great military power but actually a nation economically prostrate and on the verge of all-out civil war. The economy deteriorated, sapped by the military demands of foreign war and internal strife, by spiraling inflation, and by Nationalist profiteering, speculation, and hoarding. Starvation came in the wake of the war, and millions were rendered homeless by floods and the unsettled conditions in many parts of the country.

The situation was further complicated by an Allied agreement at the Yalta Conference in February 1945 that brought Soviet troops into Manchuria to hasten the termination of war against Japan. Although the Chinese had not been present at Yalta, they had been consulted; they had agreed to have the Soviets enter the war in the belief that the Soviet Union would deal only with the Nationalist government.

After the war, the Soviet Union, as part of the Yalta agreement's allowing a Soviet sphere of influence in Manchuria, dismantled and removed more than half the industrial equipment left there by the Japanese. The Soviet presence in northeast China enabled the Communists to move in long enough to arm themselves with the equipment surrendered by the withdrawing Japanese army. The problems of rehabilitating the formerly Japanese-occupied areas and of reconstructing the nation from the ravages of a protracted war were staggering, to say the least.

Years of war left the economy in a shambles, and the corrupt and inefficient government had little appeal among the masses, many of whom found Communist promises of agricultural reform and land redistribution attractive. Though he too espoused reform, Chiang proved either incapable or unwilling to make the far-reaching changes needed to strengthen his administration and its appeal to the common man.

The war between the two parties resumed after the Japanese defeat in 1945. Four years of fighting between Communists and Nationalists followed the defeat of Japan. By 1949, in spite of heavy American aid to Chiang, the CCP occupied most of the country. Chiang Kai-shek fled with the remnants of his KMT government and military forces to Taiwan, where he proclaimed Taipei to be China's "provisional capital" and vowed to reconquer the Chinese mainland. The KMT authorities on Taiwan still call themselves the "Republic of China."

The Korean War proved to be a gift to Chiang, who had retreated to the island province of Taiwan. On June 27, 1950, President Harry S. Truman, reversing his earlier decision not to become further involved in the Chinese civil war, ordered full support to Chiang and instructed the U.S. Seventh Fleet to "neutralize" the Taiwan Strait to prevent possible attacks from the mainland. Chiang offered to send his troops to fight in Korea, an idea supported by General Douglas MacArthur. The offer, however, was turned down by the U.S. Joint Chiefs of Staff. At the end of July 1950, Chiang received MacArthur in Taipei. The two discussed the possibilities of military cooperation, but nothing concrete came of the meeting and no Nationalist forces ever fought in Korea.

But fervent anti-Communism and the indubitable fact that he was an enemy of the Communist Chinese gave added legitimacy to his regime and opened the floodgates of U.S. aid. In the decades to follow, Chiang's regime became progressively less brutal and eventually opened to something close to democracy. In addition, the island republic's economy boomed by the 1970s, until by the 1980s, its gold reserves actually surpassed those of the United States. Chiang was the president of the Republic of China on Taiwan until his death April 5, 1975.