CHINA ON VERGE OF BREAK-UP

Grey River Argus, 20 June 1947, Page 5

CHINA ON VERGE OF BREAK-UP

Inflation and Communist Warfare

(Rec. 6.30). NEW YORK, June 18. “A crisis in China is building up to a point where it may shortly, steal headlines from Russia and the Balkans”, writes ■ the United Press foreign editor, Mr Harrison Salisbury.

“The United States is faced with a difficult problem as to how to avert a general collapse of Marshal Chiang Kai-shek’s regime. The Secretary of State, General Marshall, although he is new engrossed in the projects for the rescuing of European economy, is believed to be turning his attention to China’s creeping political debility, and galloping inflation. The Chinese National Government, is now confronted with a major military crisis, in the form of the sensational Communist successes in Manchuria, the lates-t of which was the Communist landing near Tientsin, and an advance to Tangku. This new Communist threat has emphasised the inability of the Government forces to parry the blows of the fast-moving Communist troops. In Manchuria itself, the Communist drive has succeeded in paralysing the Chinese Nationalist armies, despite the fact that they have constituted some of the best at Chiang’s command, and they are mostly Americantrained and American-equipped, for all practical purposes, the Communists have now confined the Nationalists' to a few large cities—Mukden, Szepingkai, Changchun, Fashun, and Kirin. Several of these points aie closely besieged, and they might. fall to an aggressive assault. Furthermore, the Nationalists have recently lost a considerable percentage of then troops, and large quantities of equipment. The loss of Manchuria, with its rich natural resources, and heavy industries, would be a blow which would rock the Chiang Kai-shek regime to its foundations. . “In this situation, the Chinese Government is besieging General Marshall for American assistance, particularly for the release of the five hundred million dollar export-import loan for China, which has been witheld, penGing a solution of China’s internal difficulties. However, there is now considerable doubt whether even a large Joan would solve China’s difficulties for very long. The Governments failure to check riotous inflation, plus the military failure, has produced great political uneasiness. Some American quarters fear that the situation i? now past mending, and that, r-n matter what remedial action ,’s taken, China will experience’ an explosive blow up, which may result io. splitting the country into regional areas, controlled by war lords, as it was twenty years ago”.