The Collapse of Nationalist China: How Chiang Kai-shek Lost China's Civil War

This admirable book explains how China's Nationalist government led by Chiang Kai-shek earned the epithet “incompetent and corrupt” during the late days of its existence in mainland China. Parks Coble has soundly substantiated some of the rumors that gave rise to that thumbnail explanation of why Chiang's regime was swept away by Chinese Communist forces in 1949.In his acknowledgments, Coble evocatively describes a decades-long journey to understand the collapse of China's Guomindang-led government. His trek originated in discussion of the Nationalist failure in graduate seminars led by the late Lloyd Eastman, pathbreaking researcher on Republican China. In those days, intriguing snippets and speculation stood in for archival documentation. Coble now applies his expertise and narrative flair to an eye-opening examination of source materials to which scholars have at last gained access during the past twenty years, particularly the papers of T. V. Soong (Song Ziwen), brother-in-law of Chiang Kai-shek, and of Arthur Young, longtime financial adviser to Chiang's government. Coble also makes good use of the Shilüe gaoben, recently published collections of day-to-day records of Chiang's writing, appointments, and incoming documents, and draws as well on the valuable work of scholars writing in Chinese on financial conditions of the 1930s and 1940s.Coble makes the case that China's Nationalist leadership mishandled financial affairs so seriously following the Allied victory over Japan that dizzying hyperinflation undermined public morale, economic revival, and anti-Communist military campaigns. Regrettably, financial incompetence and the spread of corruption were closely related. In a skillful selection of telling details and anecdotes from his voluminous sources, Coble describes how the mismanagement of exchange rates, currency reforms, tariff policies, and government bond sales provided opportunities for illicit activity by officials. With greedy officials leading the way, the salaried class turned to black markets simply to survive. Relief that peace had finally arrived in China after eight years of anti-Japanese war dissipated as inflation eroded families’ savings. Once-loyal citizens who had recently witnessed Nationalist officials swooping in to make predatory seizures of property in coastal cities long occupied by Japan were further embittered by bureaucrats who gained personally from efforts to stabilize China's currency.In Coble's analysis, largely preventable financial chaos led precipitously to the decisive defeat of Chiang's armies in 1949. As he argues, “Currency collapse was a precursor—not a result of—military failure” (8). Soldiers deserted as Nationalist military commanders whose pay dwindled in real value sold the rations intended for their troops.The book portrays Chiang Kai-shek as heedlessly irresponsible. Chiang appears not to have been corrupt himself but was inattentive to financial affairs, appearing to act only to contain the political fallout of questionable activities in his wife's extended family. Nonetheless, he insisted on policymaking authority, failing to delegate responsibility to financial experts or to follow advice that might have calmed public panic.Although Coble's account uncovers the origins of the “incompetent and corrupt” label in dismaying detail, the related debate over the “loss of China” is not yet resolved. After appearing in the book's subtitle as the main agent of military defeat, Chiang Kai-shek remains largely in the background of the account. While other voices resonate in direct quotations, Chiang remains in a rather peripheral position, guilty of inaction rather than misdeeds. More direct attention might permit a deflection of blame from his long-tarnished reputation.In Chiang's eyes, accelerating inflation after 1945 was the result of the military challenge posed by the Chinese Communist Party (CCP). In his diary, he expressed determination to fight inflation on the battlefield. In reflections reviewing the month of May 1946, after his forces had won an important battle at Siping in Jilin Province, Chiang noted that inflationary pressure had eased and public morale had improved as a result of his victory.1 Within a year or so of the escalation of the Nationalist-CCP conflict into full civil war in mid-1946, however, Nationalist armies were losing most battles and melting away in mass desertions.Coble's account of financial and political collapse is largely focused on conditions during the civil war's down slope for the Nationalists, when successive military losses and the printing of massive amounts of nearly worthless currency led to a dearth of basic supplies in urban China and a hemorrhage of financial capital to offshore havens. To place these dire circumstances in a wider perspective, reference may be made to fateful political realignments soon after the victory over Japan.Unlike Chiang Kai-shek, Americans engaged in China policy tended to be swayed by the Soviet portrayal of Mao and his followers as “so-called Communists.” During the year after Japan's defeat, American advisers encouraged Chiang to compromise with the CCP, to accept its continuing autonomy and military strength, and to form a coalition government with the rival party. As hostilities escalated in 1946 following Chiang's refusal to concede military authority over northern China to the CCP, Americans strongly advised him against campaigning to dislodge Mao's forces from their expanding occupation of the Manchuria region. Yet Chiang was unwilling to give up territory that had been seized by Japan in the early 1930s and later recognized by the wartime allies as rightfully belonging to Nationalist China. Disagreement between Chiang and his powerful patron over how to handle the CCP perhaps contributed to a loss of confidence in his government's financial position.The actions of another major actor also set the stage for uncontrollable hyperinflation during the second half of the Nationalist-CCP conflict. The policy of the United States not to become embroiled in civil war in China encouraged Soviet support of the CCP. War-weary Soviet leaders were as wary as their American counterparts about being drawn into a new conflict. Reacting to the American attitude, however, in 1945 and 1946 Soviet forces shifted from upholding the return of Manchuria to Chiang's government to supporting the CCP's takeover of the region.With close and anxious attention to the changing behavior of three erstwhile allies—the CCP, the Soviet Union, and the United States—Chiang Kai-shek deliberated in his diary and fought on. Arguably, commitments by the United States to support the status quo that he salvaged from the nearly complete collapse of his state are the consequence of Chiang's stubborn persistence.

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