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shoes for food .It was during the Long March that Mao Zedong established his indisputable leadership within the Communist Party. By 1935, those previously higher than Mao in the Communist Party leadership were all demoted because they adhered to the Soviet policies of regular warfare, which led to heavy Communist losses in battles with the Nationalist troops that far outnumbered the Communist ones.  The triumph of Mao in the Communist leadership set the tone for future Communist policies in the war years: the Communists were to practice guerrilla warfare in the face of enemies that far outnumbered them, be they the Nationalists or later, the Japanese.  Second, the Communists were to rely on the farmers for support, instead of the industrial workers according to classical Marxism, because in China farmers far outnumbered industrial workers and were a more popular base of support.

The War Against Japan and the Chinese Civil War (1937-1949)

In Yanan the Communists rebuilt their force. Meanwhile, the Japanese were aggressively progressing in China in the name of protecting their citizens and properties in China.  In September 1931, Japan occupied Chinese Manchuria, beginning what is called in Japanese history the Fifteen Year War, which would see Japan take up much of China from 1937-45, expand into southeast Asia starting from July 1941, engage the U.S. in various battles in the southern Pacific, and finally surrender. In China, 1927 to 1949 saw one war of foreign (Japanese) invasion, formally termed the Eight Year War (1937-45), and two civil wars between the Chinese Communists and Nationalists (1927-36, 1945-49).

In the face of Japanese invasion of China, the United States condemned Japan and extended financial support to China, primarily under a category called "Lend-Lease," a term coined to refer initially to Americans lending and leasing used battleships to Britain during the Battle of Britain (1940-41) in World War II. The Lend-Lease program was extended to many other countries under the invasion of the Axis Powers, including China. Eventually, all the money and goods lent during the war became free gifts from the U.S. to these embattled countries. The Nationalist government heavily lobbied the U.S. for support. In 1942, Madame Chiang Kai-shek herself toured the U.S., lobbied the U.S. congress, and promoted the United China Relief. The "China Lobby" still exists as a term today to refer to the lobbyists for Taiwan--where the Nationalists left for in 1949--in the U.S. Congress.

Wartime China’s financial dependence on the U.S. (over $3.8 billion in goods and cash, 1937-45) was a new source for Chiang Kai-shek’s revenue and perhaps as much as $1 billion of it went into private pockets.  In addition to corruption, power struggles plagued the various factions within the Nationalist government, although much of the struggle was never made public in the Chinese or American newspapers. Government corruption, plus inflation in China (1939, 83%, 1940, 124%, 1942, 235%), made American money, when exchanged at the official rate of 1:20, almost worthless ($17 million in 1942 to the United China Relief).

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