1941: China

Marked by the thirtieth anniversary of the founding of the Chinese republic, celebrated at Chungking with speeches and parades on Oct. 10, the year 1941 found China still engaged in its life-and-death struggle with the Japanese invader. Two further memorable anniversaries occurred during the course of 1941. The war in China entered its fifth year on July 7, while Sept. 18 marked the tenth anniversary of the Japanese invasion of Manchuria. Less than three months after this latter date, Japan was engaged in war with the United States, Britain and the Netherlands East Indies in an effort to establish its full mastery over the Pacific.

WAR IN CHINA

Japanese Forces Thrown Back.

With one or two notable exceptions, Japanese campaigning in China was of a desultory character throughout most of the year. During the first few months several Japanese thrusts were undertaken in the provinces of Central China, both north and south of the Yangtze River. Separate campaigns of considerable intensity occurred west and north of Sinyang (Jan. 24-Feb. 10) in Honan and Hupeh provinces; around Ichang (March 9-15) in southern Hupeh; and west of Nanchang (March 15-April 10) in northern Kiangsi. In each case, after early advances, the Japanese forces were thrown back to their starting points with heavy Iosses. A more successful Japanese drive into the Chungtiao mountain region of southern Shansi (May 8-31) resulted in the occupation of new territory, but the general strategic position of the Chinese forces in North China was not seriously affected by this local setback.

Blockade of Chinese Coast.

Early in February a Japanese landing at Mirs Bay, on the coast of Kwangtung province in southern China, initiated a more intensive effort to enforce a blockade of the Chinese coast from Canton to Shanghai. The greater part of this long coastline, including several major ports, had never been occupied by Japanese forces. A Chinese smuggling trade of large dimensions had continuously brought goods in and out of free China at many different points. Between February and April a series of Japanese landings all along the coast sought to plug these leaks in the blockade. Port cities such as Pakhoi, Swabue, Chaoyang, Foochow, Wenchow and Ningpo were successively occupied by Japanese landing parties of larger or smaller size. In some cases these descents on the coast were little more than glorified raids, which confiscated or destroyed concentrations of Chinese supplies. Raids on the Kwangtung coast in March, for example, were said to have gained rich hauls of rice, salt, sugar and cotton at several Chinese storage points, as well as quantities of tung oil, tungsten, and other commodities destined for export. In other cases the landing operations were prosecuted in considerable force, leading to a number of minor campaigns before the Japanese troops were forced to withdraw. Foochow, occupied on April 21, was not regained by Chinese forces until Sept. 2 after a counter attack of fairly large proportions. Most of the other ports were reoccupied within a week or ten days after the original Japanese landings. On the whole this Japanese attempt to make the blockade complete had no lasting effect, although it undoubtedly netted the Japanese certain stocks of stored Chinese goods and temporarily reduced the size of the smuggling traffic. The rather small results of these difficult and protracted operations led some observers to believe that they may have been undertaken in preparation for a possible campaign in Southeast Asia, where much of the success achieved would depend on the efficiency with which landing parties could operate.

Bombing of Chinese Cities.

The summer months were marked, as usual, by almost continuous Japanese bombing raids on the cities of interior China. As early as March 19 the mists that hang over Chungking in the winter had lifted sufficiently to permit the first mass Japanese air raid of the year. During the winter much work had been done in an effort to carry still further the elaborate protections against bombing raids that had been developed in Chungking since 1938. Additional tunnels had been dug into the hills of China's wartime capital, bringing the capacity of bombproof shelters to the point where more than 300,000 persons could be accommodated at one time. Chinese fighter planes and anti-aircraft defenses were still inadequate, however, so that the Japanese raiders were largely unopposed and could work their destruction with relative ease. Large sections of the city, some of which had been rebuilt since the preceding October, were again devastated. Efficient air-raid warning devices kept the casualties to a minimum, although one notable tragedy occurred on the night of June 5-6, when more than 700 men, women and children were suffocated or trampled to death in a panic caused by failure of the ventilation system in a large public shelter. In May the American Ambassador had a close call, while in September the British Ambassador's residence was hit. During the period from Aug. 8 to Aug. 15, for eight days and nights when the moon was at the full, Chungking was subjected to an almost unbroken series of raids. Less continuous attacks were made on many of China's other great inland cities, virtually all of which were entirely undefended and offered no military objectives. As in previous years, despite the civilian casualties, the heavy toll of destruction and the temporary disruption of economic pursuits, the ordeal by bombing had no apparent effect on Chinese morale or on the nation's determination to see the struggle through to the end.

Japanese Drive on Changsha.

Shortly after the middle of September, a powerful Japanese drive on Changsha, center of an important grain-producing region in northern Hunan province, began six weeks of the severest fighting of the year. Approximately 130,000 heavily mechanized Japanese troops pushed rapidly down the railway south of Hankow and succeeded in entering Changsha on Sept. 28. A day or two later, however, the Japanese forces withdrew from the city and within a week had given up all territory occupied during the offensive. Chinese reports claimed that the retreat was 'a débâcle' forced by frontal and flank attacks and resulted in heavy Japanese losses, while Japanese spokesmen asserted that it was a 'planned withdrawal' after the objective had been attained. On Oct. 2, as the withdrawal from Changsha was being made, a second Japanese offensive struck at Chengchow, strategic railway junction in northern Hunan province. Chinese defending forces evacuated the city on Oct. 3 and then reformed their troops to contest further Japanese pressure. Meanwhile Chinese armies in southern Hupeh province had themselves taken the offensive against Ichang, the important Yangtze River port marking Japan's furthest westward penetration in Central China. By Oct. 8 these Chinese forces had apparently fought their way into the city, but after several days' fighting were eventually forced to withdraw. For a time this drive also threatened Japan's hold on Shasi, a port further down the river toward Hankow. Foreign eye-witness reports of the condition of the wounded, supported by photographs of the Chinese victims, claimed that the spearhead of this Chinese offensive was broken when the Japanese forces resorted to the use of mustard gas shells in the environs of Ichang. During the first days of November counter-attacking Chinese troops defeated the Japanese and reentered Chengchow, thus essentially restoring the status quo obtaining on all fronts in Central China prior to the campaigns begun in mid-September.

These campaigns had again demonstrated Japan's inability to complete the conquest of China, or even to win and hold additional territory. For three years, since the occupation of Canton and Hankow in October 1938. Japan's military forces had proved unable to consolidate their hold over new areas. Ichang, occupied in June 1940, constituted the single major exception to this rule. The operations in this region in October 1941, moreover, had shown that the Chinese armies were capable of waging large-scale and effective counter-offensives. Given adequate air forces and mechanized equipment, these armies might be expected to transform the war of attrition in China into a war of reoccupation of lost territory. In evident recognition of the need to contain the Chinese armies, a second Japanese drive was launched against Changsha toward the end of December. At the close of the year, Japan's forces were for a third time within striking distance of the city, but Chinese counter-attacks from Jan. 2-6, 1942, trapped the invaders in the greatest Chinese victory since the beginning of the war. As a result of this offensive the Japanese lost 60,000 killed or wounded in four days fighting.

New Areas of War in Asia.

With the beginning of Japan's drive into Southeast Asia on Dec. 7, the position of China and the Chinese armies became even more strategic. In China's northern provinces the first air bases within easy bombing range of Japan's vulnerable industrial centers may well be established. The inexhaustible reserves of Chinese man-power are available for service not only on the fronts in China, but also in the southeastern sectors of Indo-China, Burma and Malaya. By counter-attacking within China itself, these armies can also force the Japanese to divert troops and munitions needed in other quarters of the war zone in the Pacific. The first practical example of this possibility was given in Kwangtung during the middle of December, when Chinese forces carried out an offensive on the mainland back of Hongkong which drove to within twenty miles of the rear of the Japanese besiegers.

FOREIGN RELATIONS

Increase of Allied Aid.

Press reports from Chungking on Jan. 4 revealed conclusion of the second part of a Chinese-Soviet trade accord involving an exchange of Chinese wool for Soviet munitions and machinery; the third part of the accord, covering the export of Chinese minerals, was concluded on Jan. 12. Announcement was made on Feb. 4 that Clarence Gauss, American Minister to Australia, would succeed Nelson T. Johnson as Ambassador to China. On Feb. 7 Lauchlin Currie and Emile Despres, special envoys of President Roosevelt, reached Chungking. After a round of visits, negotiations between the American envoys and representatives of the Chinese government, dealing mainly with economic affairs, began on Feb. 11. The report presented by Mr. Currie on his return to Washington in March was largely influential in establishing the framework within which increasing American aid, military as well as economic, was rendered China during 1941. While in Chungking, moreover, Mr. Currie impressed upon Chinese officials the necessity of reaching a settlement of the serious conflict between the central authorities and the Chinese Communist leaders. On April 25, negotiations were concluded between the United States and China dealing with the operation of the $50,000,000 American stabilization loan granted on Nov. 30, 1940. A British loan for £5,000,000 was signed at the same time, the Chinese government contributed $10,000,000, and something remained of the former Chinese currency stabilization fund — thus making available nearly $100,000,000 to the new combined Anglo-American-Chinese fund to back China's currency. An important definition of American post-war aims affecting China was embodied in an exchange of letters on May 26 and May 31 between Secretary Hull and Quo Tai-chi, new Chinese Foreign Minister. Secretary Hull's letter stated that the American government 'expects when conditions of peace again prevail to move rapidly, by processes of orderly negotiation and agreement with the Chinese Government, toward relinquishment of the last of certain rights of a special character which this country, together with other countries, has long possessed in China by virtue of agreements providing for extraterritorial jurisdiction and related practices.' Clarence Gauss, the new American Ambassador, arrived at Chungking on May 23. Unofficial reports on May 30 indicated that the United States Army Air Corps was granting permission to its pilots and mechanics to resign temporarily for service in China, where they were training Chinese aviators to fly American planes. On still another front, meanwhile, China Defense Supplies, Inc., under the presidency of T. V. Soong, had been set up in the United States to handle lease-lend supplies being sent to China. Owen Lattimore, widely known American writer on the Far East, was appointed by President Roosevelt on June 28 to the post of political adviser to Generalissimo Chiang Kai-shek.

Severing of Diplomatic Relations with the Axis.

Following recognition by the Axis of Wang Ching-wei's puppet government at Nanking, the Chinese government on July 1 severed diplomatic relations with Germany and Italy and recalled its diplomatic representatives from Berlin and Rome.

Three American highway transport experts, Daniel Arnstein, Harold Davis and Marco Hellman, arrived in Chungking on July 13 to survey the Burma Road equipment and report on methods to improve its administration. On July 14 British assurances to negotiate for the abolition of extraterritorial rights in China when peace is restored were embodied in an exchange of notes between Foreign Minister Quo Tai-chi and the British Ambassador, Sir Archibald Clark-Kerr. Colonel John S. Chennault, leader of the American pilots who will train Chinese aviators to fly American bombers and fighter planes, left Manila for Chungking on July 18. The ABC Stabilization Board, acting on Aug. 18 to improve the value of China's currency, fixed the Chungking dollar exchange rate at 5 11/32 American cents, approximately 10 per cent above the current 'black market' exchange. American and British banks licensed to sell foreign currency under the regulations freezing Chinese assets will furnish American dollars to legitimate importers at the new rate. Announcement was made in Washington on Aug. 26 that the President had ordered the dispatch of an American military mission to China. Headed by Brigadier General John Magruder, who had twice served as military attaché in China, the mission was to include a staff of trained officers and operate under direction of the Secretary of war. Its general purpose, as stated by the President, was to make 'lend-lease assistance to China as effective as possible in the interest of the United States, of China, and of the world effort in resistance to movements of conquest by force.'

American Military Mission Arrives.

Announcement was made at Chungking in early September that the Eurasia Aviation Corporation had been transformed into a 100 per cent Chinese-owned and operated company; the German employees were discharged and the German interest taken over on July 29 and Aug. 1 respectively. The American military mission, headed by Brigadier General Magruder, arrived in Chungking on Oct. 5. With the arrival in Chungking on Nov. 23 of John H. Hall, American oil company engineer, it was revealed that plans were being made for laying a pipeline along the 700-mile Burma Road to supply gasoline for China's war machine; the project would save millions of dollars spent in trucking and would free the road for the shipment of other war supplies.

INTERNAL AFFAIRS

Kuomintang-Communist Dispute.

A sharp crisis in Kuomintang-Communist relations developed early in January, following a sanguinary clash between armed forces in southern Anhwei province. The Fourth Route (Communist) Army's rear-guard, with 8,000 or 9,000 men, including medical units, nurses and wounded, was attacked by 80,000 central troops near Maolin on Jan. 6, as it prepared to cross northward over the Yangtze River. The ensuing battle lasted eight days, when the Fourth Route unit ran out of ammunition. The detachment suffered at least 4,000 casualties, more than 2,000 were taken prisoner, while less than 2,000 succeeded in fighting their way out. The two commanding generals of the Fourth Route Army were both wounded; General Yeh Ting was captured and placed under arrest, and General Hsiang Ying disappeared. Estimates of casualties suffered by the attacking central troops ranged from 20,000 to 30,000. At Chungking the central military authorities accepted the charges of General Ku Chu-tung, the commander responsible for the attack, that the Fourth Route Army had 'lengthily prepared for revolt' in order to extend the territory under its control. On Jan. 17 the National Military Council decreed the dissolution of the Fourth Route Army and announced that General Yeh Ting had been imprisoned and was awaiting court-martial for his part in the 'revolt.' The Council's decision left some 90,000 Fourth Route Army troops, located in areas north of the Yangtze River, without legal standing, central financial support, or officially recognized commanders.

In response to these actions, the Chinese Communist party immediately reconstituted its Central Revolutionary Military Committee — a move which indicated the gravity of the political crisis. The new Committee's first act was to reappoint commanders to the Fourth Route Army on its own responsibility, and then to send a list of twelve demands to Chungking, asking for the punishment of the leaders responsible for the attack on the Fourth Route Army unit and for guarantees that such incidents would not recur. The seven Communist members of the People's Political Council absented themselves from the session which met March 1-10 in Chungking, after presenting a list of twelve points on which they wished satisfaction. To this Council Generalissimo Chiang Kai-shek delivered a speech supporting the action taken by the central military authorities, but ending with an appeal to the Communist members to renew 'their contribution to national solidarity.' There the matter was allowed to rest, although it continued to affect the political atmosphere throughout the year. While the Fourth Route Army was not restored to an officially recognized status, it was allowed to continue in being and it has pushed a steady guerrilla campaign of large proportions against the Japanese in the occupied areas of the lower Yangtze Valley. In North China the Eighth Route Army has also continued to wage effective warfare against the Japanese forces.

Need for Improved Economic Conditions.

Addressing the Kuomintang Central Executive Committee in session at Chungking toward the end of March, Generalissimo Chiang Kai-shek excoriated the party for its shortcomings. His speech stressed the need for improving economic conditions and criticized the party's failure to cope adequately with the country's economic problems. 'The economic difficulties.' he said, 'are 70 per cent and the military difficulties 30 per cent of the war problem now facing the nation.' Widespread hoarding and food profiteering had already forced the Generalissimo to place his sanction behind drastic measures for dealing with the speculators. After four years of war, the problem of inflation was growing increasingly serious, and it was complicated by the difficulty of establishing effective wartime controls in a country as loosely organized as China. Following the close of the Kuomintang's plenary session on April 2, a considerable reshuffle of party and government posts occurred, with new figures appearing in the Secretary-Generalship of the party, in the Overseas Affairs Bureau, in the Foreign Ministry and in a large number of lesser posts. The new Foreign Minister was Quo Tai-chi, who had been Ambassador to London for many years. On May 20, in accordance with a decision reached at the plenary session, a Ministry of Food was established, with Hsu Kan, former Vice-Minister of Finance, as its first Minister. A special report of the Opium Suppression Commission, issued in Chungking early in June, admitted that the evil had not been entirely stamped out, but stated that Kweichow province's 30,000,000 ounceper-year opium production had been completely eliminated, that only isolated areas planted with poppy remained in Yunnan, and that by far the greatest consumption of opium in China was restricted to Japanese-occupied areas. An important economic conference, called to devise methods of transferring collection of the land tax from the provincial governments to the central government and to improve national finances in general, convened at Chungking on June 17. Chen Chi-tang, Minister of Agriculture and Forestry, announced at the end of July that he was aiming to increase China's production of foodstuffs in 1941 by 3,487,000,000 pounds, chiefly by use of improved seed, enlarged acreage, and supplements to man power. The Ministry is also promoting reforestation, land reclamation, sericulture, and cotton and tea production. During August it was announced that the Chinese government was preparing to purchase the products of the food-producing provinces with food-bonds, and would then undertake to distribute the food at controlled prices. In the same month two provincial governors were changed, three presidents of national universities were dismissed, one corrupt official was executed, and many shifts were made in minor posts, in a continuation of the clean-up started after the Kuomintang plenary session. A new Inter-Provincial Trade Commission, organized under the Ministry of Economic Affairs, held its first meeting in Chungking on Sept. 3 to discuss readjustment of the structure and policy of provincial trade enterprises. The 'double-tenth' celebrations held all over free China on Oct. 10, the national anniversary, were given special zest by the victory won at Changsha.

The Nanking Government.

The Japanese-dominated Nanking government of Wang Ching-wei opened its new 'central reserve bank' on Jan. 6. As the first move to get their currency into circulation, the Nanking authorities announced that all customs duties were required to be paid in notes of the new bank. In June, Wang Ching-wei visited Tokyo, where he conferred with leading Japanese Cabinet officials and was granted an audience with the Emperor. A joint statement issued by Premier Konoye and Wang Ching-wei on June 23 pledged mutual cooperation toward 'constructing the new order of East Asia.' As Japan's part in this mutual effort, a loan of 300,000,000 yen to the Nanking government was announced on June 28, following Wang Ching-wei's return to China. The loan was euphemistically earmarked for 'economic reconstruction,' and Japanese sources hinted that further installments would probably have to follow. Up to this time, Japan's lead in according diplomatic recognition to its puppet had not been accepted by other powers. On July 1, however, possibly in an effort to cement increasing Nazi influence in occupied China, Germany and Italy formally recognized the Nanking government, and the Axis satellites in Europe — Rumania, Slovakia, Croatia, Hungary, Spain and Bulgaria — took similar action. See also JAPAN; UNITED STATES; WORLD WAR II.