In 1928, Chiang Kai-shek founded a new Republic of China at Nanjing, and over the next three years, he managed to reunify China by a combination of military oper- ations and inducements (known as “silver bullets”) to various northern warlords to join his movement. One of his key targets was warlord Zhang Zuolin, who controlled Manchuria under the tutelage of Japan. When Zhang allegedly agreed to throw in his lot with the Nationalists, the Japanese had him assassinated by placing a bomb under his train as he was returning to Manchuria. The Japanese hoped that Zhang Zuolin’s son and successor, Zhang Xueliang, would be more cooperative, but they had miscalculated. Promised a major role in Chiang Kai-shek’s government, Zhang began instead to integrate Manchuria politically and economically into the Nanjing republic. Chiang Kai-shek saw the Japanese as a serious threat to Chinese national aspirations but considered them less dangerous than the Communists. (He once remarked to an American reporter that “the Japanese are a disease of the skin, but the Communists are a disease of the heart.”) After the Shanghai massacre of April 1927, most of the Communist leaders went into hiding in the city, where they attempted to revive the movement in its traditional base among the urban working class. Shanghai was a rich recruiting ground for the party. A city of millionaires, paupers, prostitutes, gamblers, and adventurers, it had led one pious Christian missionary to comment, “If God lets Shanghai endure, He owes an apology to Sodom and Gomorrah.” 3 Some party members, however, led by the young Communist organizer Mao Zedong, fled to the hilly areas south of the Yangtze River. Unlike most other CCP leaders, Mao was convinced that the Chinese revolution must be based on the impoverished peasants in the countryside. The son of a prosperous peasant, Mao had helped organize a peasant movement in South China during the early 1920s and then served as an agitator in rural villages in his native province of Hunan during the Northern Expedition in the fall of 1926. At that time, he wrote a famous report to the party leadership suggesting that the CCP support peasant demands for a land revolution. But his superiors refused, fearing that adopting excessively radical policies would destroy the alliance with the Nationalists. After the spring of 1927, the CCP-Nationalist alliance ceased to exist. Chiang Kai-shek attempted to root the Communists out of their urban base in Shanghai. He succeeded in 1931, when most party leaders were forced to flee Shanghai for Mao’s rural redoubt in the rugged hills of Jiangxi Province. Three years later, using their superior military strength, Chiang’s troops surrounded the Communist base, inducing Mao’s young People’s Liberation Army (PLA) to abandon its guerrilla lair and embark on the famous Long March, an arduous journey of thousands of miles on foot through mountains, marshes, and deserts to the small provincial town of Yan’an 200 miles north of the modern-day city of Xian in the dusty hills of North China. Of the ninety thousand who embarked on the journey in October 1934, only ten thousand arrived in Yan’an a year later. Contemporary observers must have thought that the Communist threat to the Nanjing regime had been averted forever. Meanwhile, Chiang Kai-shek was trying to build a new nation. When the Nanjing republic was established in 1928, Chiang publicly declared his commitment to Sun Yat-sen’s Three People’s Principles. In a program announced in 1918, Sun had written about the allimportant second stage of “political tutelage”: As a schoolboy must have good teachers and helpful friends, so the Chinese people, being for the first time under repub- lican rule, must have a farsighted revolutionary government for their training. This calls for the period of political tutelage, which is a necessary transitional stage from monarchy to republicanism. Without this, disorder will be unavoidable.4 In keeping with Sun’s program, Chiang announced a period of political indoctrination to prepare the Chinese people for a final stage of constitutional government. In the meantime, the Nationalists would use their dictatorial power to carry out a land reform program and modernize the urban industrial sector. But it would take more than paper plans to create a new China. Years of neglect and civil war had severely frayed the political, economic, and social fabric of the nation. There were faint signs of an impending industrial revolution in the major urban centers, but most of the people in the countryside, drained by warlord exactions and civil strife, were still grindingly poor and overwhelmingly illiterate. A Westernized middle class had begun to emerge in the cities and formed much of the natural constituency of the Nanjing government. But this new Westernized elite, preoccupied with bourgeois values of individual advancement and material accumulation, had few links with the peasants in the countryside or the rickshaw drivers “running in this world of suffering,” in the poignant words of a Chinese poet. In an expressive phrase, some critics dismissed Chiang Kai-shek and his chief followers as “banana Chinese”—yellow on the outside, white on the inside. Chiang was aware of the difficulty of introducing exotic foreign ideas into a society still culturally conservative. While building a modern industrial sector, in the officially promoted New Life Movement, sponsored by his Wellesley-educated wife, Mei-ling Soong, Chiang sought to propagate traditional Confucian values of hard work, obedience, and moral integrity while rejecting what he considered the excessive individualism and material greed of Western capitalism. Unfortunately for Chiang, Confucian ideas—at least in their institutional form—had been widely discredited by the failure of the traditional system to solve China’s growing problems. Critics noted, as well, that Chiang’s government did not practice what it preached. Much of the national wealth was in the hands of the so-called four families, composed of senior officials and close subordinates of the ruling elite. Lacking the political sensitivity of Sun Yat-sen and fearing Communist influence, Chiang repressed all opposition and censored free expression, thereby alienating many intellectuals and political moderates. With only a tenuous hold over the vast countryside (the Nanjing republic had total control over a handful of provinces in the Yangtze valley), Chiang Kai-shek’s government had little more success in promoting economic development. Although mechanization was gradually beginning to replace manual labor in a number of traditional industries (notably in the manufacture of textile goods), about 75 percent of all industrial production was still craft-produced in the mid-1930s. Then again, traditional Chinese exports, such as silk and tea, were hard-hit by the Great Depression. With military expenses consuming about half the national budget, distressingly little was devoted to economic development. During the decade of precarious peace following the Northern Expedition, industrial growth averaged only about 1 percent annually. One of Sun Yat-sen’s most prominent proposals was to redistribute land to poor peasants in the countryside. Whether overall per capita consumption declined during the early decades of the century is unclear, but there is no doubt that Chinese farmers were often victimized by high taxes imposed by local warlords and the endemic political and social conflict that marked the period. A land reform program was enacted in 1930, but it had little effect. Since the urban middle class and the landed gentry were Chiang Kai-shek’s natural political constituency, he shunned programs that would lead to a radical redistribution of wealth.