A Political and Economic History of China, Part 34: Japan and World War II, Part 3

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6 MIN READ - The Cautious Optimism Correspondent for Economic Affairs wraps up his 20,000 foot view chronology of World War II in China, discussing the dispositions of the Nationalists and the Communists by war’s end.

Photo: Chinese zones of factional control at the end of World War II. Note communist controlled areas in vertical red/white striping. Stars indicate Nationalist provisional capital of Chungking (blue) and communist base of Yan’an (red).

Readers who missed Parts 1 and 2 of this very abridged summary of World War II in China can go to:

1) Japan's modernization and expansionist ambitions up to the 1931 invasion of Manchuria.

https://www.cautiouseconomics.com/2025/04/china-history32.html

2) The invasion of the Chinese mainland and several years of brutal warfare.

https://www.cautiouseconomics.com/2025/04/china-history33.html

After the Xi’an Incident of 1936 Chiang Kai-shek reluctantly agreed to the united front with the Communists to resist the Japanese. The combined armies, of which the Communists were by far the smaller at the time, were renamed the Nationalist Revolutionary Army. 

Communist soldiers wore the Nationalist blue sun insignia and on paper they took orders from Chiang Kai-shek. However given ideological differences and the geographical distance between Nationalist and communist bases of control, cooperation quickly broke down. In practice the Nationalists and Communists operated independently with little coordination/cooperation.

THE COMMUNISTS

While the Nationalist government remained holed up in the Sichuan basin city of Chunking, its stalemate with the IJA provided a golden opportunity for Chinese communist rebels.

When the Japanese entered rural areas they mercilessly killed the peasantry. It didn’t matter whether village dwellers resisted the IJA or cooperated, the Japanese looted, raped, and massacred. 

In the north, the Japanese “Three Alls” policy of 1941-42 (“kill all, burn all, loot all”) was aimed specifically at civilians of which 2.7 million were killed in that campaign alone.

Given no real choice, the peasants cooperated with the communist resistance since there was no incentive to remain neutral. Either way the Japanese would kill you.

The CCP’s base of Yan’an in northwest China also conveniently bordered Japanese occupied territory in northeast China. Given the sheer size of the country, Japanese occupation was limited mostly to urban areas with little presence in the countryside. Thus communist activity spread deep behind enemy lines and infiltrated the rural landscape of Japanese controlled provinces.

The Communists were also smart enough to treat the Chinese peasants well. Mao Zedong gave strict instructions to his soldiers not to steal and to always pay for whatever food they received from Chinese civilians. This, combined with seizing land and redistributing it to the peasants, won the Communists much support among the rural Chinese population in north and northeastern China. By contrast KMT troops, themselves poorly fed, equipped, and hungry, routinely looted their fellow Chinese.

Communist military leadership was also good. Famous commanders like Zhu De and Peng Dehuai successfully harassed Japanese troops with guerilla tactics similar to those they had used against the KMT during the Jiangxi Soviet days of the early 1930’s.

Although guerilla warfare was insufficient to change the outcome of the larger war, the perception that the Communists were going on the offensive—while the Nationalist government had retreated, sacrificed land for time, and was eventually holed up in Sichuan and playing defense—transformed the Communists into heroes who were “doing something.”

Thus millions of everyday Chinese—mostly young people and idealistic university students who were unhappy with the corruption and inefficacy of the Nationalist government—made pilgrimages to Yan’an from all over the country and joined the communist resistance. During the war the communist 18th Army Group’s numbers swelled from just 20,000 at the time of the 1936 Xi’an Incident to 1.2 million by war’s end. This doesn’t include another 2 million “People’s Militia” troops.

Most of the idealistic youth had no idea how communism worked and were unaware of the repeated famines in communist Russia, Stalin’s notorious NKVD police state, the Soviet Great Terror, or the Ukrainian Holodomor. Knowing nothing about the dangers of communism, they only saw the CCP fighting and harassing the Japanese invaders and poured into Yan’an as volunteers.

Fifteen years later these idealistic students would learn for themselves what life is really like under communism when the Great Famine of 1958-1961 came, but that's a subject for later.

By war’s end the Communists had infiltrated and controlled nearly all the countryside in northeast China and much of the Yangtze region, a major factor that would determine the outcome of the upcoming Chinese Civil War.

THE WAR TURNS

As Japan ravaged China Chiang Kai-shek’s wife Soong Mei-ling, American educated and fluent in English, routinely visited the United States in search of aid. While President Franklin Roosevelt and most of Congress were sympathetic to China, the American public remained generally isolationist so all the United States would offer was modest financial and humanitarian support.

The bombing of Pearl Harbor changed all that, drawing the United States directly into the war, and the Chinese were elated to have a new, powerful ally. FDR dispatched General Joseph Stilwell (aka. “Vinegar Joe”) to Chungking to assume the role of Commander all U.S. forces in China, Burma, and India (of which there were actually few Americans) and Chief of Staff to Chiang Kai-shek.

The U.S./Nationalist China relationship was strained from the start.

Although Stillwell mastered both written and spoken Chinese, his lack of diplomacy didn’t go over well with the Nationalist government. Appalled by widespread KMT corruption, Stillwell was soon referring to Chiang Kai-shek as “Peanut” and his internal memos and discussions were so laced with personal insults that word eventually got back to Chiang.

Chiang himself was not personally corrupt (a subject for another column) but his government certainly was, especially his wife and her family. During the 1940's, as U.S. aid poured into China, Soong Mei-ling’s brother T.V. Soong, a former banker and KMT finance minister and premier, was speculated by the western press to be the richest man in the world.

Meanwhile Chiang Kai-shek frustrated Stillwell by preserving his best remaining forces for an eventual showdown with the Communists while granting only his inferior troops and what few Americans were there to do most of the fighting against the Japanese. Stillwell also clashed with the British over operations in the China/Burma border region.

The disagreements and conflicts escalated to the point that Chiang asked FDR to replace Stilwell who was recalled to the United States and replaced by General Albert Wedemeyer.

Wedemeyer was more diplomatic and restrained in his disagreements with the KMT, but he saw the same problems that Stilwell did and conveyed similar reports of Nationalist corruption and poor leadership to his superior, George C. Marshall. 

Under FDR’s presidency massive amounts of U.S. aid flowed to the Nationalist government, much of it ultimately into the bank accounts of corrupt KMT officials. Meanwhile Nationalist troops suffered from shortages of food, weapons, and even boots. KMT officials and Soong Mei-ling’s own family made fortunes during the war while Nationalist soldiers, lacking basic necessities, routinely looted Chinese villages for food. 

Wedemeyer reported large numbers of KMT conscripts, snatched from their homes, died of disease or hunger before even reaching training camp. Many who did make it were immediately sent to “hospitals” which Wedemeyer’s report compared to German extermination camps at Buchenwald.

According to Wedemeyer, the “Chinese army was starving to death in the field.”

Nevertheless, the tide of the war turned against Japan in the Pacific. By late 1944 the U.S. Navy and its submarines controlled sea lanes to and from the home islands and the Nationalists won a few battles in mid-1945, mostly pushing the Japanese back in the southern and extreme southern provinces of Hunan and Guangxi. Even when the atomic bombs were dropped on Hiroshima and Nagasaki and the Soviet Union invaded Manchuria there were still 1.2 million Japanese soldiers stationed in China.

While the United States had carried out nearly all the offensive successes against Imperial Japan, there is something to be said for China’s role pinning down over a million Japanese soldiers on the mainland, something the CCP reminds Chinese citizens today. In some propaganda the CCP claims America’s role was secondary and that it was they, the Communists, who actually defeated Japan. This is of course an exaggeration, but there can still be no question that China, with all its suffering and losses tying up the IJA, still played a significant role in Japan’s defeat. It was a period of sometimes uneasy cooperation between the Americans and the Chinese, but it ultimately worked.

Either way the final death tally was enormous. Nearly 20 million Chinese had died, mostly civilians, a number rivaled only by Soviet losses on the European Eastern Front. The Chinese economy lay in ruins with inflation running rampant. When Chiang moved the Nationalist capital back to Nanjing and attempted to rebuild the economy while simultaneously preparing for another civil war, the Communists had likewise established themselves in northern China and Manchuria and their numbers had swollen into the millions.

Once again, an outside intervention had aided the CCP. The Japanese invasion had taken the Communists from a force of perhaps 20,000 men on the brink of annihilation by the KMT to effective control of northern China and an army of millions.

This was the state of China right before the outbreak of the second Nationalist-Communist civil war of 1945-1949.

A Political and Economic History of China, Part 33: Japan and World War II, Part 2

Click here to read the original Cautious Optimism Facebook post with comments

7 MIN READ - The Cautious Optimism Correspondent for Economic Affairs continues his history of China series outlining the general chronology of the Second Sino-Japanese War, better known as World War II.

Photo: IJA Chinese territorial gains by 1940. Note that nearly every major Chinese city is occupied including Beijing, Tianjin, Shenyang, Shanghai, Nanjing, Hangzhou, Wuhan Guangzhou, Fuzhou, and Xiamen. Only Hong Kong—British territory that Japan would take in late 1941—and the remote Sichuan cities of Chengdu and Chongqing remain under Nationalist (KMT) control.

In the last column the Economics Correspondent planned to post one column summarizing the main events of World War II in China followed by one more on the aftermath effects for the rival Nationalist and Communist factions.

But upon writing it’s become clear that even a highly abridged version of the war with Japan will require more than a single column, so today’s article will be the first of two on the subject.

The Economics Correspondent doesn’t claim to know each and every battle between Chinese and Japanese forces during World War II. Like a lot of Americans he’s always been more interested in the battles between the U.S. and Japan, or between the Allies and Nazi Germany. The military campaigns in China were mostly land battles with infantry, limited armor—particularly on the Chinese side—and modest air support when compared to the European theater or great carrier battles of the Pacific.

In China, historians record 22 major battles from 1937 to 1945, defined as involving at least 100,000 soldiers. And China lost them all until mid-1945 at which point Japan was already nearly defeated by American naval blockades and strategic bombing.

FULL BLOWN INVASION

Just as it had during the invasion of Manchuria, Japan manufactured another pretext for invading the Chinese mainland in 1937: the so-called Marco Polo Bridge Incident.

On July 7, 1937 the IJA demanded to cross the Marco Polo Bridge border just outside Beiping to look for a missing solider (who had already returned to his unit the night before). When Chinese troops guarding their side of the bridge refused, the Japanese shelled their garrison and quickly moved 180,000 troops and armor into the area. Within two weeks the IJA had taken most of the Beiping and Tianjin areas.

The Marco Polo Bridge Incident marks the official start of Japan’s invasion of China proper.

Side note: Beijing was the capital of China during the Ming and Qing dynasties. The words “bei” and “jing” in mandarin mean “north” and “capital.” 

However in 1928 Chiang Kai-shek moved the Nationalist Chinese capital south to Nanjing (“south capital”) and consequently Beijing was renamed Beiping or “northern peace.” When the CCP won the Chinese civil war in 1949 they moved the capital back north and the city was once again named Beijing.

CHINA RETREATS

From 1931 to 1937 Chiang Kai-shek had pleaded with the public that China wasn’t ready for all-out war with Japan and his predictions proved correct. Nationalist forces were generally no match for Japan’s modernized army which rapidly moved south down the eastern coast and was already threatening to take Shanghai by the fall of 1937.

It didn’t help that Chiang is also considered by historians to be a poor military commander. Chiang often gave contradictory orders and he frequently countermanded his field commanders without telling them, leading to confusion on the front lines. 

While Chiang adopted a strategy of organized retreat when confronted with superior enemy firepower—a rational enough strategy—he sometimes impulsively threw divisions of his best troops at the Japanese to fight for strategically unimportant but symbolically prestigious objectives.

One of these times was the Battle of Shanghai. In fact, of the 22 major battles between China and Japan, the most consequential were at the war’s beginning as their outcomes laid the critical foundation for a large-scale Japanese occupation and eventual stalemate for the remainder of the war.

At Shanghai Chiang Kai-shek threw his best, crack German-trained KMT troops into the battle and put up a much tougher resistance than the Japanese had anticipated. Japanese generals predicted conquering the city within days, but the fighting lasted three months, eventually becoming door-to-door in what was the largest urban battle of World War II before Stalingrad. 

Chiang’s initial decision to commit his elite divisions was logical as it bought time for the Nationalist government to plan and execute a retreat from the nearby capital of Nanjing. The KMT also needed time to deconstruct and relocate a great deal of its industrial capacity. However once that objective was met Chiang ordered his crack units to keep fighting to the death and the KMT’s best soldiers were eventually annihilated.

Chiang could have ordered retreat and preserved much of his most capable forces. The government’s retreat was by then well underway, but he still insisted on fighting as long as possible. Reason? Shanghai was the fifth largest city in the world with a large presence of westerners and western investment. Chiang hoped that keeping the battle alive in the world press would gain sympathy from the western powers who would intervene on China’s behalf.

The west didn’t come to China’s aid and the Battle of Shanghai kneecapped Chiang’s fighting capacity for the remainder of the war.

As KMT troops fell back inland the Japanese pursued. Many sought revenge for the losses they had suffered at the hands of the stubborn Chinese. By the time the IJA reached the Nationalist capital of Nanjing (Nanking in Wade-Giles Romanization) their troops went berserk and carried out the six week-long “Rape of Nanking.”

The Correspondent doesn’t want to go into detail about the specific atrocities at Nanking. Facebook would probably censor or deboost this article based on the explicit nature of a detailed description anyway. But readers are encouraged to do a little research of their own including, for those who want to do more than just a little, reading the late Iris Chang’s book “The Rape of Nanking” (1997) which is credited for popularizing the previously little-known subject with western audiences.

A shorter summary of the Nanking atrocities, which surpassed the Nazis for brutality and sadism, is available on Wikipedia at:

https://en.wikipedia.org/wiki/Nanjing_Massacre#Rape

The Rape of Nanking is just one of countless atrocities carried out by the IJA upon Chinese civilians during the eight year war, but it’s the most famous in the west.

MORE RETREAT AND STALEMATE

Outgunned and having lost his best troops, Chiang Kai-shek borrowed a strategy from the Russians during Napoleon’s time: trading land for time.

Chiang knew China was so large there was no way Japan could control all of it. It would take the deployment of millions of Japanese soldiers and several years just to hold key areas and their supply lines would be thinly stretched. In the meantime Chiang hoped that foreign military help would come to the rescue.

The IJA in turn was smart enough not to attempt to occupy every square inch of China, limiting itself to key coastal regions and major commercial corridors such as major cities along the Yangtze River. This left the countryside mostly unoccupied which provided fertile ground for Chinese communist guerilla operations.

By late 1938 the Nationalist government had retreated all the way to Chungking (modern pinyin: Chongqing) in the western Sichuan basin, making the remote city the provisional capital where it remained until 1945. 

During its 1938 retreat the KMT destroyed Yellow River dykes in a defensive scorched earth campaign. The flooding and destruction stopped the advance of the Japanese in the north, but drowned up to 90,000 Chinese civilians and 500,000 more died in the ensuing famine. Later the Chinese communists, also operating out of northern China, used the disaster area as a successful recruiting ground against both the Japanese and the Nationalist government.

The Sichuan basin was surrounded by mountains and its isolation made the provisional capital of Chungking difficult to capture. Japanese ground forces were unable to concoct any serious threat at taking the city. All they could accomplish was aerial bombardment and holding the Nationalist government in check while they went about exploiting the Chinese mainland.

On another side note, Japan invented and carried out the first civilian firebombing in history and its target was—you guessed it—the provisional capital of Chungking. This version of strategic bombing would later be adopted by the U.S. Army Air Force on an immeasurably larger scale when U.S. B-29’s virtually incinerated most of the Japanese home islands' cities in 1945.

However, when reading through many historian condemnations of America's cruelty there’s rarely any mention that Japan pioneered the tactic years prior on Chinese civilians. There’s also little mention of the concept of karma.

Chiang’s retreat to Chungking certainly provided geographic protection from the IJA, but it also isolated the KMT. The primary coastal cities and commercial corridors like the Yangtze River were cut off as were the tax revenues they generated. The KMT government was increasingly forced to use the printing press for war finance and high inflation plagued Nationalist-controlled China through 1945 and into the Nationalist-Communist Civil War.

Chiang was also cut off from his urban political base and the Sichuan basin was marginally controlled by warlords, leading to political isolation as well.

Ultimately both sides settled into a stalemate with Japan controlling most of the important cities and coastal areas. The ever opportunistic Wang Jingwei, Chiang’s former KMT rival, was installed as president of a subordinate Chinese puppet government, and Japan resorted to frequent bombing of the provisional capital while waiting for the Nationalist government to collapse, but it didn’t. 

Wang Jingwei is roundly considered a traitor to Chinese of all persuasions, but in 1944 he left for medical treatment in Japan for an injury he had incurred from a failed assassination attempt in 1939.

Wang died in November 1944 which was probably a blessing for him. The Allies would almost certainly have extradited him to China where the Chiang Kai-shek government would have executed him along with many other convicted wartime traitors.

Stay tuned for the closing chapter of the war in the next installment.

A Political and Economic History of China, Part 32: Japan and World War II, Part 1

Click here to read the original Cautious Optimism Facebook post with comments

6 MIN READ - The Cautious Optimism Correspondent for Economic Affairs apologizes for his extended under the weather absence but returns with a new article on Japan’s invasion of China during World War II, a conflict estimated to have killed 19 million Chinese.

The Second Sino-Japanese War is a massive story that, even when abridged, will require several articles. In this first installment the Economics Correspondent will lay out the background leading to Japan’s full blown invasion of mainland China in 1937, using some material already covered in previous articles. Next we’ll follow up with a high level overview of the war’s chronology, and lastly with the war’s aftermath for China’s rival Nationalist and Communist parties.

BACKGROUND 

The roots of Japan’s ambitions to colonize China begin in the 19th century.

Before 1839 both China and Japan were largely closed off to the western world. The Chinese Qing Dynasty traded reluctantly with the west and only through a single port—the southern city of Canton (today Guangzhou)—while the Japanese Tokugawa Shogunate traded exclusively with the Dutch and Chinese and also through only one port: Nagasaki.

Both the isolationist Qing and Tokugawa resisted foreign interaction, Japan even beheading shipwrecked sailors the moment they washed ashore, and the western powers countered with varying levels of force. 

The British forced more trading ports and concessions from China by winning the First Opium War of 1839-43. The United States sent Commodore Matthew Perry’s “black ships” into Tokyo Bay who announced his arrival by loudly firing his cannons into the water (1853).

China and Japan reacted very differently to the west’s more forceful demands.

China’s Qing Dynasty, ruled first by the incompetent and hedonistic Xianfeng emperor (r. 1850-1861) and after him the far more important but ultra-reactionary Empress Dowager Cixi (r. 1861-1908) continued to resist western trade and influence by every means necessary, culminating with the disastrous Boxer Rebellion in 1901. While the western world was undergoing the Second Industrial Revolution, China fell hopelessly behind.

In Japan the 265-year old Tokugawa Shogunate, having no answer to Perry’s cannons, lost face and succumbed to reform-minded officials. The emperor, for centuries merely a figurehead subservient to the shogun, regained power and the shogunate was banned forever.

Japan’s young and renown Meiji Emperor’s calendar years in power (1867-1912) nearly mirrored Cixi’s (1861-1908), but their policies couldn’t have been more different. While Cixi believed China’s cultural superiority could overcome western technology, the reform-minded Meiji recognized Japan had fallen behind and needed to learn all it could from the west. While Cixi resisted western trade, western technology, and western ideas as much as possible, Meiji opened Japan to the world.

Japan went on a crash course signing diplomatic and trade treaties with the western powers while enthusiastically importing western goods, technology, weapons, and advisors at a frenetic pace. Japan sent its officials throughout Europe and the United States to learn as much as possible and the end result was a spectacular ascent nearly unrivaled in history. In one generation an isolated, primitive, agricultural island nation modernized into a major world power.

Unfortunately Japan’s imperial ambitions grew as quickly as its economic and military power. By 1894 it was engaged in its first major regional war: the First Sino-Japanese War which is little known in the west compared to the Second Sino-Japanese War (aka. World War II).

Japan’s smaller navy routed the corrupt Qing Dynasty’s fleet at the battle of the Yalu River while its modern army humiliated Qing forces at several key Chinese ports. In the 1895 Treaty of Shimonoseki China was forced to cede Korea and Taiwan which Japan colonized for the next fifty years.

Japan then shocked the world by defeating Russia’s navy at the Battle of Tsushima Strait (1905).

Side note: Admiral Isoroku Yamamoto, the man who planned Pearl Harbor, was a gunnery ensign at Tsushima and lost two fingers in the battle.

By 1905 Japan had wrestled away territory from Russia: more Manchurian ports, control over the South Manchurian Railway, leases over Manchurian territory including the city of Dalian, and half of Sakhalin Island.

And Japan’s Chinese ambitions hardly ended in 1905.

During World War I Japan sided with the Allied Powers and made small contributions (mostly rhetorical) as a tactic to expand its sphere of influence. Japanese representatives at the Treaty of Versailles demanded and were granted formerly German Micronesian islands such as the Marianas, Carolines, and Marshalls. Japan was also handed China’s previously German-administered Shandong province, but the unexpected public outrage and demonstrations it ignited in China forced the Allies to pressure Japan into returning the territory in 1922.

MANCHURIA

Japanese ambitions for Chinese territory were hardly satisfied after World War I. By the late 1920’s the Japanese government was becoming militarist-fascist and it focused on gaining control of all Manchuria—a frigid, resource-rich territory in China’s northeast roughly the size of France, Germany, and Switzerland combined.

By now China had entered its chaotic “warlord era” and Japan cooperated with Manchurian warlord Zhang Zuolin, the Japanese providing Zhang military and economic support in exchange for permission to make large commercial and strategic investments in the industrial north.

By 1928 the Japanese believed Zhang's son and opium addict, Zhang Xueliang, would be easier to manipulate than his more powerful father, so they assassinated the elder Zhang by blowing up his railcar on a bridge. However the younger Zhang shook off his drug habit and resisted the Japanese who in turn responded with a full invasion of Manchuria in 1931.

The invasion of Manchuria, beginning September 18, 1931, is considered by many historians the true opening salvo of World War II as it preceded Hitler’s invasion of Poland by eight years.

As a pretext for invasion the Japanese army incited the Mukden Incident, a false flag operation whereby the IJA exploded dynamite near a Japanese-owned railroad and then accused Chinese dissidents of carrying out the attack. After five months of fighting Japan had assumed full control of the Manchurian northeast.

Japan had hoped to provoke then-Chinese leader Chiang Kai-shek into an all out war, but Chiang understood China’s military was hopelessly behind Japan’s and he used diplomacy and stalling tactics to avoid war. In the ensuing six years Chiang tried to simultaneously crush China’s Communist Party rebellion movement, modernize the Chinese economy and military, and hold off the Japanese.

As Chiang stalled for time, the Japanese worked on consolidating their gains. They set up the puppet state of Manchukuo headed by the former Qing boy-emperor Pu Yi. They also opened the notorious Unit 731—at that time the world’s most advanced biological warfare program—in the northern city of Harbin and tested experimental bacterial agents on eventually tens of thousands of live Chinese (and a few ethnic Russian) subjects throughout the country, a topic the Correspondent will discuss more in a future column.

Then, as a plan to sever more Chinese provinces from the mainland, the Japanese declared three autonomous Chinese regions bordering southern Manchuria. The justification was a claim that the people of these three territories no longer wished to live under Chinese rule and wanted to join Japan. Using this pretext Japan set up puppet administrative councils and demanded Chinese Nationalist (aka. Guomingdang or KMT) officials leave the area.

Chiang Kai-shek, once again not ready to enter into a major war with Japan, didn’t resist. Now the Japanese controlled not only Manchuria but also Chinese territory as far south as Beijing, stretching from Mongolia to the Bohai Sea.

All this time the Chinese public and Chinese communist rebels agitated for the Nationalist government to fight Japanese aggression, but Chiang Kai-shek knew China wasn’t ready and would lose a full scale war. It was only when Chinese dissent reached a head in 1936—when Chiang was kidnapped by Zhang Xueliang and forced to agree to unite with the Communists in a united front to resist Japan—that the policy of appeasement ended.

To read more details on Chiang’s kidnapping, the so-called “Xi’an Incident,” go to:

https://www.cautiouseconomics.com/2025/03/china-history31.html

Upon hearing that the Chinese KMT and Communists were no longer fighting one another and had agreed to unite, the Imperial Japanese Army (IJA) moved up their timetable for their invasion of the Chinese mainland where we’ll resume in the next article.