The governmental crisis is unresolved. The Kuomintang remains the dictatorial ruler of nationalist China.
Its armies, its secret police, its bureaucracy, its gangster-run labour front, its economic enterprises are the state structure. It has been unable to spread its support to include other groups. It remains a corrupt police regime, exploiting all classes, employing terror and, vampire-like, sucking the maximum loot out of the people and the economy.
Its base is its military and police power. It does not enjoy the confidence of the banking, industrial, or commercial groups. The Kuomintang has a rapacious relationship toward productive social groupings in the country. It supports the landlord class against the peasantry and that is its primary social connection.
Through its state power the Kuomintang is actively in control of the preponderance of industry and commerce. All the state monopolies and the multitudinous enterprises, which far outweigh private business, are subject to its corruption.
This ruling party and its support do not represent a rising bourgeois class such as organised the nationalist movement in the Twenties. This is not only two decades later, but also 17 years of war later – years in which defeat, Japanese occupation, rise of Stalinist power, shrinkage of the economy and unabated misery of the people have reduced the compradore bourgeoisie to a secondary place and a harassed existence.
The Chinese state is a feudo-bureaucratic bourgeois dictatorial state. This state cannot unify China because it bases itself on the least cohesive element, the landlord class. whose tendency is a centrifugal one. It is alienated from the 400 millions of suffering masses and, therefore, cannot arouse the support necessary to defeat Stalinism.
Its military helplessness is an expression of its inability to introduce even the simplest reforms against landlordism. This ruling class will be forced to put all its hopes in a Third World War, in which, by offering China to the US, it will expect American military power to accomplish the tasks it cannot perform.
The military crisis reflects this situation. The Stalinists now control all of Manchuria except Mukden, the nine most important Northern provinces (which have just been organised into the North China Liberated Area) and areas well below the Yellow River and inside the Great Wall. The Stalinists have proven their ability to penetrate to the Southern Yangtze River as well.
At the National Assembly sessions one delegate stated: “the troops don’t know what they are fighting for — the government carries out no reforms that could gain the support of the people.” The Herald Tribune’s excellent correspondent Christopher Rand writes (June 7): “The army’s state of mind is regarded by many as the chief reason for the Communists’ success in China.
“Critics, both foreign and domestic, have said the army’s leadership is confused from top to bottom, that there is little idea of any common purpose and almost no fighting spirit in most units.”
The tendency now is for local landlord defence units to develop since the Kuomintang armies are so undependable. The result is the strengthening of warlordism and disintegration of the national administration.
The economic paralysis is demonstrated by an inflation which makes the German inflation of the early Twenties look like normalcy. Production and normal commerce are impossible under these conditions and tend to cease. Highest profits are in speculation. And at every stage at every transaction the ubiquitous KMT officialdom gets its huge rake-off in gangster fashion. Compounding the monetary problem is the constant administrative intervention of the state. Taxes are raised, materials and bank withdrawals are controlled and limited.
The result has been the alienation of large sections of the Chinese and even the American bourgeoisie from Chiang Kai-shek. Many of them now talk of the hopelessness of Kuomintang China and are beginning to look to the CP as a possible alternative.
The CP has directed a heavy propaganda barrage to these capitalists, offering all kinds of guarantees of lower taxes, freedom of trade and production, and no expropriation. To the Chinese bourgeoisie the CP offers an all-out fight against competing US and Japanese goods, and to foreign capital it offers welcome and protection.
The Stalinists give as evidence of good faith the policies in their areas. Mao Tse-tung denounces “encroaching on industry and commerce — and hitting at industry and commerce in the field of tax policy” as “leftist tendencies” which must be corrected.
Under these circumstances the US has not found an instrument to effectuate its China policy. The US has poured into China from four to five billions since the end of the war. It has supplied the Kuomintang with several hundred ships and planes and has armed its divisions.
At the war’s end the US navy ferried nine entire Kuomintang armies into Manchuria by ship and plane. Its intervention has been constant. General Marshall directed this intervention for over a year as special envoy. Ambassador Stuart has his fingers deep in Kuomintang politics. The US obtained a treaty from China which gives it free transport and practical control of inland navigation. The American ECA determines the distribution of 370 millions in aid and thereby determines the orientation of a large section of the economy. But US policy is a failure because it cannot find a substantial political faction which is dependable enough and capable enough to resist the disintegrating forces.
The feudo-bureaucratic cliques of the Kuomintang cannot serve this function. Their venality, their incompetency and their landlord connections make of them a corrupt class. They are incapable of serious concessions even to the bourgeoisie, on which the US would like to base itself. The Chinese bourgeoisie has shown itself incapable of organising a resistance inside the Kuomintang. The failure of American policy is linked to the inner rot of the Chinese bourgeoisie.
A new vigorous political group is essential to US policy. But such a group could only be erected outside of the Kuomintang arena and in opposition to it. It would have to undertake such sweeping reforms as would be tantamount to revolt against these entrenched power. In such a situation the way would be opened to quick Stalinist victory. The dilemma of American policy is that it must support Chiang, out of fear of the alternative to his defeat, and yet this support is squandered and dissipated into unproductive channels, which in turn undermines Chiang’s regime.
There are indications that at Yalta the Big Three divided Asia. as follows: Russia to get Manchuria, Southern Sakhalin, the Kuriles and Darien; US to get the rest of China, Japan and the Northern Pacific; Britain and her satellite empires to keep Southeast Asia and India. In the inter-imperial antagonisms which have become dominant since then, the US has been unable to take and consolidate its share. The Russians have given far, far less support to the Chinese Stalinists than the US has to the Kuomintang. Harold Isaacs writes: “...the Russians have meanwhile played a passive game, and they have been amply rewarded for doing so. Every American policy, every America act has so far served the Russian rather than the American interest in Asia. Thus Russia has held itself largely aloof from the developing civil war in China, although not so aloof that its influence is wholly unfelt.”
America is hated in China today as never before because of its failures and interventions and continued support to a despotic regime. America has failed to bring either unity or peace to China, although it desired both in order best to effectuate its economic domination.
The failure in China is a major historic blow at American capitalism. It may well prove fatal. The century-long lure of the Chinese market, the fabulous possibilities and potentials of that continent are almost lost. The possibility comes daily closer to realisation that in place of this great hope of American imperialism is rising a bastion of Stalinism which would create a base from which the US could be driven from the Western Pacific and Asia, economically and militarily.
Stalinism’s southward march has reached a decisive stage. The Northern provinces have been consolidated. Manchuria is the arsenal for the CP armies.
A stable regime based on moderate land reform and on the support of the middle and rich peasants and landlords has been established. Recent events indicate that the Stalinists intend to expand to an all-national power. Recently a conference was called in Harbin of trade unionists for the purpose of launching a national labour organisation. The working class of the big coastal cities like Shanghai, Tientsin and Canton, and in the interior in Nanking and Hankow is not under Stalinist influence. Memory of the betrayals of 1927–28, though dimming, is still present.
However, in the absence of an independent alternative of substantial power, the CP exerts an enormous attraction as against the terroristic gangsterism of the Kuomintang. The Stalinists know that China can never be conquered, nor can any conquest be made secure, without the urban working masses. That is the explanation of the Harbin Conference. This conference laid the basis for the first: national labour federation. The Stalinists have never attempted this before. Such a federation would have as its object the organisation of the working class under Stalinist leadership. It is part of the plan of Stalinist expansion. The working class has not yet yielded to Stalinist blandishments. Therein lies hope.
The second event is the Stalinist wooing of dissident and dissatisfied bourgeois elements. The May Day call of the CP started: “All democratic parties and groups, people’s organisations and social luminaries speedily convene a political conference, discuss and carry out the convoking of a people’s representative assembly to establish a democratic coalition government.”
There has been considerable response to this call. The Kuomintang Revolutionary Committee (a dissident group), the Chinese Democratic League, the Farmers and Workers Democratic Party and others have replied favourably. Scores of Kuomintang exiles lying in Hong Kong have taken up the call. The outstanding figure among these exiles is Marshall Li Chai-sum, Chiang’s former chief of staff. General Feng, the “Christian general,” supports the call. Hong Kong seethes with intrigue and negotiations.
The basis is being laid for a “coalition” of these groups with the CP. Not one of these groups has a mass following. However, that is not what the CP needs at this time. Such a “coalition” would enhance the threat to Chiang’s regime and would give a semi-legal cover to the Stalinist conquests which could be organised as a “national government.”
The great student demonstrations which have swept the cities for months have a spontaneous character and are an immense force of protest. They are not coordinated nor politically channeled. They are movements of protest against Kuomintang tyranny and American intervention. This is the most important active popular upsurge since the end of the war. The government has been unable to suppress it fully. It gathers support from the intellectuals and professors. Its weaknesses are political and social. The latter above all, because it is not linked to the working masses. In the specific context of the current political arena these students, especially those in the Southern cities, that is, those who have not suffered direct contact with with it, are drawn to Stalinism.
Hope lies with the uncommitted working masses of the cities, that voiceless millions will find in themselves the power to wrest of the nation against Stalinism from the bloodied hands of the Kuomintang. The first problem and duty of revolutionists is that of survival under conditions of political terror in both sections of China. This problem alone will require require all the ingenuity and political wisdom and heroism that can be mustered.
September 6 and 13, 1948