1940: China

As the year 1940 closed in China the country was believed to be much stronger from a military standpoint than it had been at the beginning of the four-year Sino-Japanese conflict. Morale was high and confidence in ultimate victory strong. New local highways to feed the Burma Road had been built, and vast quantities of American supplies were daily being moved to Chungking and other destinations inside unoccupied territory. Needed war supplies in great quantity were also reaching China by way of Vladivostock. These supplies leave the United States by ship for the Siberian port, from where they go by rail to Chita, and then over a Russian military road to the Soviet-Mongolian border. From there they travel southward to western Suiyuan cities by camel caravan, and by donkey and mule carts.

THE WAR IN CHINA DURING 1940

China's Military Strength.

Chinese armies, at the beginning of the year, consisted of approximately 2,000,000 seasoned regulars fighting on all fronts, and more than 1,500,000 guerillas scattered throughout the country. Another 3,000,000 men, equipped with rifles, were undergoing military training. Announcement was also made by the Government in April that plans for a greatly enlarged army had been completed, and that the present strength of the forces would be augmented by the addition of about 4,000,000 men before the end of another year.

Military Operations.

At the beginning of 1940 the fighting in China had reached a stalemate, and there were no large-scale attacks by the enemy such as characterized the earlier months of the war. In the early days of January, a Japanese drive in northern Kwantung, in the neighborhood of Canton, met with stiff resistance by the Chinese, and in the heavy fighting which occurred all through January and early February, both sides lost a considerable number of men. The Chinese, however, were able to regain some territory lost in the fall of 1939 and earlier, and since then they have not been dislodged from their positions.

In the southern part of Kwangsi Province, early in February, the Japanese had concentrated 100,000 troops for their drive on the important highway town of Pinyang, but the Chinese forces executed a heavy flanking attack and forced the Japanese to retreat. It was after this defeat that the Japanese Army command issued the statement that Japan had already won 'sufficient areas in China for the establishment of a new order in Asia . . . and therefore we will not expand our operations but await your defensive.'

Drives on Shansi and Hupeh.

Late in April, the Japanese launched their eleventh unsuccessful drive in the southern part of Shansi Province, in an attempt to cross the Yellow River. By April 25, twenty-five Japanese columns, totalling 60,000 men, were marching toward their goal. By the first week in May, however, the Chinese had cut their lines of communication, and in the operations which followed, the danger of a Japanese crossing of the river had been eliminated. Late in the month, however, there was a much more serious offensive launched in the upper Han River Valley of Hupeh Province in Central China. The aim of this move was to split off the northern provinces from the southwestern ones. The first phase of the drive, centered in the northern area of Hupeh Province, met with stubborn resistance, and for a time the drive was stopped, but in June, another strong Japanese drive, beginning in the southern region of this province, finally succeeded in capturing the highly important port city of Ichang on the Yangtze River above Hankow, as well as the almost equally important city of Shasi. These were extremely serious losses for the Chinese, and although there has been much desperate fighting in this region since June in an effort to retake Ichang and Shasi, they were still in the hands of the Japanese at the end of the year.

Chinese Recapture of Nanning.

Perhaps the most important military gain of the Chinese fighting forces during the entire year was the retaking, late in October, of the city of Nanning, highly strategic communications center and former capital of Kwangsi Province. On Nov. 15, 1939, in order to cut one of China's international lines of supply through Kwangsi and Indo-China, the Japanese had made a surprise landing at Yamchow, a seaport in western Kwanting, and within a week had marched on and taken Nanning, despite fierce Chinese resistance. When the Japanese were forced to evacuate the city on Oct. 28, 1940, after having lost between 50,000 and 70,000 men, they set fire to it, and when the Chinese entered on Oct. 29 more than one half of the city had been completely destroyed by flames.

There was much sporadic fighting in North, Central, Southern and Southwestern China throughout the year, with some losses and gains on both sides. None of this fighting, however, has essentially changed the military situation.

The guerilla forces, estimated at 1,500,000 men, have carried on their ceaseless, harassing tactics in all parts of China throughout the year. They have wrecked supply trains, torn up railroad tracks, surprised and killed sentries at outlying posts, and in general rendered the Japanese hold on some of the occupied territory extremely precarious.

Internal Struggles between United Front Chinese Forces.

Disruptive forces within the Chinese United Front Armies against Japan were threatening to bring about a crisis in the relations between the Kuomintang forces and the so-called Communist forces, represented by the Eighth and Fourth Route Armies, respectively. There had been attempts on the part of Kuomintang officials in Szechuan to suppress Communist publications in that province, and units of the regular Kuomintang army had attacked Eighth Route Army detachments at several different places in the northwest, while really serious clashes had occurred between the regular Chinese Shansi provincial troops and Chinese guerilla forces operating under the Eighth Route Army. These clashes went on through the winter months, but in the early spring a compromise was reached. The Shensi-Kansu-Ninghsia border region, controlled by the Communist forces, was reduced from 23 to 19 hsien, or counties, and friction was lessened by the provision for a single magistrate in each of the 19 counties, where formerly the Kuomintang had appointed a second official. The number of regular Eighth Route Army divisions to be supported with money from the Central Government was increased from three to six, while provision was also made for the reorganization of other troops into guerilla and local units. In the guerilla districts of the occupied territory in Shansi and Hopei provinces, administrative areas, as well as areas of military operations, were delimited. This settlement was not reached until April 10.

Despite the earlier compromise settlement, however, acrimonious disputes between the Kuomintang and the 'Communist' elements continued through April. A report filed at Chungking by conservative Kuomintang leaders in Northwestern China late in April, accused the Eighth Route Army of attempting to set up a separate regime in Shensi, Kansu and Ninghsia, as well as in other places in Northwest China. There were armed clashes between some Kuomintang and Eighth Route Army units and a number of arrests by the Kuomintang were made. A truce was declared in May. Late in the year, however, the tension between the two groups had again become so serious that in some quarters it was believed civil war was imminent. Part of the trouble was caused by the demand of the Minister of War, General Ho Yingchin, that the Communist new Fourth Army be withdrawn before Dec. 19 from the area south of the Yangtze River in the neighborhood of Nanking — an area which was assigned to them three years ago, and which they have wrested from the Japanese and turned into a guerilla base. The Red Army asked for reconsideration of this demand, as well as for redress of what, rightly or wrongly, they consider to be the serious grievances enumerated above. Charges and counter-charges flew back and forth between irreconcilables on both sides and actual fighting between the two factions on a somewhat extended front occurred. While the differences between the two groups are admittedly very grave, it is the opinion of most reliable observers that as long as a serious threat from Japan continues the United Front will hold.

War in the Air.

In preparation for bombing raids which would be resumed when the thick mists which protect the capital city of Chungking in winter would disappear before the spring sunshine, the government, on March 2, announced a comprehensive program for the evacuation of large numbers of people from Chungking. The authorities stated that they had bomb shelters for only 250,000 people and that therefore those residents, numbering approximately 107,000, not engaged in occupations essential to the conduct of national affairs, would be removed to safer districts outside the city.

Throughout the entire month of August, Chungking was bombed continuously from the air, civilian casualties running into the hundreds and property damage, both Chinese and foreign, running into the millions of dollars. In the raids of Aug. 19, 20 and 21, more than 25,000 homes were destroyed and almost twice that many people were rendered homeless and destitute.

Re-opening of Burma Road.

From a military viewpoint, the reopening in October 1940 of the Burma Road, one of China's vital supply lines which had been closed by Great Britain in July, was of major importance. Early in July, when there were persistent rumors that Great Britain would comply with Japan's demand for closing of the road, China's most important remaining transportation link with the outside world, Chiang Kai-shek appealed to both Russia and the United States for material aid. Announcement of the closing of the Burma Road by Great Britain for a period of three months was made on July 17 and elicited a formal statement by a Chinese Foreign Office spokesman condemning this concession. He characterized it as 'unfriendly and unlawful,' and emphasized the importance of the road to China in her struggle against Japanese aggression. 'Britain,' he said, 'has given immense benefit to the Japanese aggressor and her actions are thus tantamount to aiding and abetting China's enemy.' The press and public also joined in the general condemnation. It was understood that the promise to close the Burma Road had been made on the definite condition that Japan would consider the possibility of a broad settlement of outstanding Far Eastern questions, including an early and equitable settlement of the Sino-Japanese war, and that in this matter the British had offered their services. It was also understood that Japan, in return for the British concession, had promised to make every effort to arrange peace terms with Chiang Kai-shek.

On Oct. 10, a Chinese Foreign Office spokesman said that during the three months the Burma Road had been closed, which was during the rainy season, it had been greatly improved: roadbeds and tunnels had been made more efficient, and repair shops and workmen's quarters had been modernized to be in readiness for the reopening of the road which Britain had announced would take place on Oct. 17. At midnight on Oct. 17, the first of the 3,000 American-made trucks waiting to leave Lashio in British Burma for Kunming, started on their journey. It was estimated that over 100,000 tons of cargo were waiting to move. With the Japanese already occupying three air bases in northern Indo-China, from where their bombing planes could reach Kunming in an hour and forty-five minutes, it was realized that the road would be subjected to heavy bombardment. On Oct. 19 a number of bridges across the Mekong River near the Burma border were bombed and made temporarily useless. Nevertheless, repairs were immediately made, and despite persistent attacks, trucks have continued to carry supplies over this road to Nationalist China. (See also JAPAN.)

POLITICAL AND ECONOMIC CONDITIONS; FOREIGN RELATIONS

Political Affairs.

Adoption of National Constitution.

Announcement was made in February at Chungking that a National People's Congress, scheduled to meet later in the year, would discuss a definite date for the adoption of a National Constitution. As the People's Council was preparing for its sessions in Chungking, prominent left-wing leaders were arriving from Yennan, the Communist capital of Shensi, to discuss with Chiang Kai-shek the serious difficulties which had arisen between the Kuomintang and so-called 'Communist' groups, and the basis on which future cooperation would be possible. It had become increasingly clear that if effective resistance to Japan were to continue, the differences would have to be settled. Both sides, therefore, were prepared to make compromises. (See above.)

The National People's Council, which began its meetings on April 1, ended its session on April 10. Besides consideration and temporary settlement of some of the differences between the Kuomintang and so-called 'Communist' group, the Council finished its work by approving the final, revised draft of the new Constitution. The Constitution, containing 148 articles, is to be the basis of deliberations when the National Assembly is called. The first chapter, of seven articles, defines the Republic of China as consisting of twenty-eight provinces, including Manchuria, Mongolia and Tibet, and provides that no territorial alterations can be made without the consent of the National People's Congress. The rights and duties of the people are outlined in the second chapter, and the powers and functions of the People's Congress are set forth in the third chapter. The organization and powers of the national government are defined in the fourth chapter, and the fifth outlines a system of local government. The sixth and seventh chapters outline matters of national economic life and education, while chapter eight deals with amendments to the Constitution. Due to a number of reasons the National Assembly which was to consider the adoption of the Constitution did not meet in November as originally planned.

Organization of Secret Societies.

Early in March, a spokesman of China's Secret Societies announced in Chungking that a central governing body had been organized representing these groups, which would from thence on support the Government in its resistance to the Japanese. These Societies, whose activities are carried on underground, have been a powerful influence in China's political and economic life for centuries. They claim to represent twenty million people throughout the country. More than a thousand representatives were present at the banquet given to prominent Chungking officials when the announcement was made.

Establishment of Japanese Puppet Regime of Wang Ching-wei.

Early in January, two prominent supporters of the former Premier, Wang Ching-wei, made public at Hongkong details of an agreement which they stated had been reached between Wang and the Japanese concerning a Japanese-sponsored government to be established at Nanking in the near future, headed by Wang Ching-wei. The political and economic concessions granted to Japan in this supposed agreement resulted in a number of desertions from the Wang camp, and the resentment aroused throughout the country had the effect of strengthening the determination in China to fight on at all costs. Peace terms which Wang Ching-wei offered to the Chungking Nationalist Government at this time on behalf of Japan were rejected.

As the new 'All China' Japanese sponsored regime, headed by Wang Ching-wei, was inaugurated at Nanking on March 30, the president of China, Dr. Lin Sen, in a broadcast from Chungking, bitterly denounced the Wang Ching-wei as a traitor and declared that Chiang Kai-shek would lead the entire nation 'to fight to the end' for China's liberty. He appealed to the world to continue support of the government at Chungking and said China 'would live on despite the Japanese and their puppets.' A huge reward was offered for the arrest and capture of the traitor.

On the day of the inauguration the United States Government issued a statement reaffirming its opposition to 'armed force as an instrument of national policy,' and announced that it would continue to recognize the Chungking Nationalist Government as the legal government of China. At the time of the inaugural ceremonies the American, British, French and Soviet ambassadors were at the Nationalist capital of Chungking and no representative of any foreign government, with the exception of former Premier Abe of Japan, was present at Nanking for Wang's inaugural. Assurances of loyalty to the true Chinese regime at Chungking were forthcoming in a called message of allegiance from the 120,000 residents of the Philippine Islands, and from General Lung Yun, governor of the highly important province of Yuman in China's Southwest. The Nanking regime had repeatedly claimed that General Lung would cooperate with it.

Meanwhile the regime of Wang Ching-wei had ordered the expulsion from Shanghai of six prominent American newspaper men, and in the week of terrorism against both foreign and Chinese journalists which followed, one Chinese newsman was murdered and others were subjected to severe beatings. Finally, the Municipal Council asked the foreign consular body to check 'the present terrible wave of political crime which is destroying all confidence here and ruining Shanghai's reputation throughout the world.'

When announcement was made that Japan would extend formal recognition to the Wang Ching-wei regime on Nov. 30, China's Foreign Minister, Wang Chung-hui, threatened cessation of relations with any foreign power giving formal recognition to it. He said that 'the Nationalist Government . . . has repeatedly declared and desires to reiterate . . . that Wang Ching-wei is an arch traitor of the Republic . . . and the puppet Nanking regime is one whose acts . . . are null and void in respect to all Chinese citizens and all foreign countries. The so-called treaty just signed is totally devoid of legality and has no binding force.'

Peace Proposals.

With the closing of the Burma Road and the cutting off of supplies from the outside world, during the three months from July to October the future outlook for China was dark, and there were some members of the Chungking Government who seemed ready to give serious consideration to the possibility of peace with Japan on the best terms obtainable. Nevertheless, the Government did reject peace proposals offered by Japan on July 29. These proposals were said by foreign observers in close touch with the Chungking regime to be, roughly: (1) outright session by China to Japan of the five provinces of Hopei, Chahar, Shantung, Shansi, and Suiyuan: (2) recognition of Wang Ching-wei as president of a Chinese republic which would include the remaining provinces, plus British Burma, French Indo-China and Thailand (this assumed, of course, a German victory in Europe); (3) decision as to the status of Manchukuo would be indefinitely deferred.

Late in November Japan, wishing to close the China 'incident' and thus be free to pursue her plan of southward expansion, again offered peace terms to China. These were rejected with the statement that peace would be possible only on the 'complete and unconditional withdrawal of Japanese forces from all China.'

Economic Conditions.

Although constant recruiting had taken large numbers of men off the farms, agricultural production in the unoccupied areas was sufficient to support the armies in the field. However, both in North and Central China there were serious food shortages as a result of late autumn crop failures, and in both Peiping and Tientsin there were food riots. In Hopei Province, in which both of these cities are located, inhabitants of 12,000 villages in 82 of the 140 counties were, according to reliable reports from missionaries and travelers, reduced to eating bark, swamp grass and porridge made of weeds and cotton husks.

Despite the tremendous economic dislocation in China, caused by the war, however, two of the resulting problems: scarcity of manufactured products and widespread unemployment, were being solved in some degree, at least, by the Chinese industrial cooperative movement which began in a small way in August 1938. This development of small scale, decentralized industries has proceeded steadily, and by the end of 1940, scattered through unoccupied China there were over 3,000 individual workshops, employing 30,000 worker members and 50,000 hired members, with a total monthly production of $500,000 in United States money worth of manufactured goods. Over 225 different products are made, including clothing, shoes, blankets, medical supplies, soap, candles, porcelain, leather goods, chemical products, machinery and power equipment. More than one half of the workshops are engaged in textile manufacture. Next in order of production are chemical industries, small-scale machine building, mining and food products. There are also cooperative units for the reorganization of transport facilities. With financial aid from the government, loans from Chinese banks and gifts from interested friends abroad the number of these small mobile industries is constantly increasing.

This disruption of China's economic life is still extremely serious, especially in interior China, where during the last year, inflation, hoarding and speculation in staple commodities resulted in very severe hardships to vast numbers of people. In some cases the retail prices of food and clothing rose almost 1,000 per cent from their level in March 1940. Despite these discouraging developments, the recent loans from the United States and Great Britain to stabilize the currency and thus check the inflationary movement, and the further promise of substantial help from the United States to those nations which are fighting aggression, make the outlook for the future seem much brighter. (See also WORLD ECONOMICS.)

Financial Conditions and Loans.

Early in May the head of the Political Affairs Bureau at Chungking asked for support of the Chinese dollar which had depreciated to the lowest value in its history, being quoted at 4 15/16 American cents. In official circles the decline of the dollar was attributed to the drop in the English pound, and the failure of the Stabilization Fund of £10,000,000 established by the British in 1939 to continue support of it. The Chinese also claim, however, that it resulted from the falling off of China's export trade due to the Japanese blockade.

On Sept. 25, the United States made a loan of $25,000,000 to China. As a means of securing the loan, the United States would obtain tungsten from China in order to build up its reserve stock of this material. On Nov. 30, the United States Government announced a further loan of $100,000,000 to Nationalist China, one-half of which was loaned against supplies of wolframite, antimony and tin, and the remainder for stabilization of Chinese currency. This credit brought total American financial aid to China in the past two years up to $186,000,000. Shortly after, on Dec. 10, came an announcement by the British Under Secretary of Foreign Affairs that Britain was granting financial aid to China to the amount of £10,000,000, half of which was in credits to be used in China by countries within the sterling bloc, and the remaining half for currency stabilization. (See also INTERNATIONAL BANKING AND FINANCE.)

Transportation of Supplies.

One of China's chief economic difficulties during 1940 was the problem of transportation of supplies. The closing of the Burma Road had been a serious blow to the country and its reopening in October was a major cause for rejoicing. (See above.)

China had already begun to experience the serious consequences of the loss of the city of Nanking in Kwangsi province, which the Japanese had captured in November 1939. The loss of this city and frequent bombings of the railway from French Indo-China to Yunnan Province were holding up supplies destined for China's fighting forces. By the middle of March, it was estimated that over 150,000 tons of supplies, mostly munitions, had accumulated at the port of Haiphong in Indo-China. Before the bombing of the railway a maximum of 18,000 tons monthly had been reaching Yunnan Province over the railway, but with the destruction of bridges and tracks, only one-fourth of that amount was being received in Interior China in the early months of the year.

By the first of April, French and Chinese engineers had made extensive repairs to the tracks and bridges of the railway from French Indo-China to Yunnan, China's most important communication link with the outside world. The Japanese were at this time bringing pressure on the French authorities to prohibit the transportation of supplies destined for Chiang Kai-shek. So far the French had refused to comply, and gasoline and other critically needed supplies were again beginning to move along the railway.

The collapse of French resistance in Europe in mid-June, however, brought grave concern in China over the fate of French Indo-China, through which ran China's main export route. Fearing a Japanese attack on Indo-China, China's regular forces on the Indo-China border were strengthened. When, on June 20, under pressure from Japan, France was compelled to halt war supplies over the railway, Foreign Minister Wang Chung-hui, denounced the arrangement and pointed out that in the Chinese-French Convention of 1930 France had agreed to the transportation through Indo-China of all kinds of merchandise, including arms and ammunition. On June 23, following the announcement of the new agreement, more than 100,000 tons of Chinese supplies and more than 1,000 trucks were held up at the port of Haiphong.

These difficulties made imperative several changes. The Chinese Ministry of Communications made preparations to reorganize internal transport on the basis of the least possible use of gasoline, using both human and animal carriers. By the middle of August, thousands of pack animals, carts and coolies had been mobilized to transport military supplies inside China. Thousands of coolie-drawn, two wheeled carts were being utilized for moving munitions and other supplies to the fighting fronts. It was estimated that three able-bodied coolies could pull such a cart with a load of 650 pounds on an average of 18 miles a working day over terrain which motor vehicles could not travel.

Foreign Relations.

In September the Chungking Government offered the French authorities in Indo-China military assistance to help repel the threatened Japanese invasion; otherwise, the statement said, China would take independent action. When the French submitted to Japan's ultimatum and gave their consent to 'limited' military operations in the colony the Chinese expressed strong disapproval, and began to prepare for eventualities.

As the Japanese began to push into Indo-China, the United States Government, in order to indicate continuing support of Chungking, announced on Sept. 25 its much needed loan to China of $25,000,000. (See under Financial Conditions and Loans.)

The widespread destruction of life and property caused by the continuous bombing of Chinese cities in the West and Southwest, but especially of Chungking in April, May and June, brought a strong protest from the American Secretary of State, in which it was announced that 'the attitude and the position of the people and Government of the United States towards ruthless bombings of civilian populations have been made abundantly and frequently clear and we wholeheartedly condemn such practices wherever and whenever they occur.' The American ambassador at Tokyo also protested against the threat to American lives and the destruction of American property in Chungking and notified the Japanese Government not only that it would not withdraw its nationals from Chungking, as had been suggested, but that it would hold Japan responsible for injuries. A further action of the President of the United States in adding petroleum products and scrap iron to the list of products for which export licenses would be required, was a source of great comfort to the Chinese at a time when their morale needed strengthening. See also articles on JAPAN, UNITED STATES and WORLD ECONOMICS.