NATIONALISTS FACE CERTAIN DEFEAT IN CHINESE CIVIL WAR

Otago Daily Times, Issue 26958, 18 December 1948, Page 7

NATIONALISTS FACE CERTAIN DEFEAT IN CHINESE CIVIL WAR

New Zealand Press Association—Copyright

NANKING, Dec. 16. Nationalist China is seething with rumours as the civil war drama appears to draw rapidly to a close. New developments appear under way in the battle region north of Nanking, but few foreign observers and few Government officials believe the Red tide can be stemmed. Neither apparently does the Premier designate, Dr Sun Fo, who nearly three weeks after he accepted nomination from Generalissimo Chiang Kai-shek still has not formed the so-called War Cabinet.

Rumours anticipating events which may or may not occur are producing a spate of nervous excitement in the key cities of Nanking and Shanghai. Speculation is still focused largely on North China, where there is still no clue to the intention of the Nationalist General Fu Tso-yi. Only a miracle can save the Nationalists, in the opinion of high-placed foreign sources in Nanking, says William Parrott, NZPA-Reuter correspondent. It is believed that the Nationalist Armies, already badly mauled, will continue to lose further men by casualty and defection, in addition to the 1,500,000 troops already lost to the Communists in the Manchurian and North China campaigns. Excitement in Nanking was confined mainly to business and political fields, adds Mr Parrott. The ordinary Chinese people remain strangely apathetic. Their main hope is for peace, their main fear is personal involvment in the fighting. Reuter’s Tientsin correspondent reports that Nationalist troops have been withdrawn from Peitang, eight miles north of Tangku, Tientsin's last outlet to the sea. Refugees to-day are clogging the highway to Tientsin as they flee before the Red tide. Reuter’s Shanghai correspondent states that large sums of money are being made and lost as speculators play the “rumour merry-go-round.” The black market rate for the American dollar, which hit the peak of 68 gold yen earlier in the week, to-day sank to 60, while shares have also declined.

The United . States transport Bayfield to-day arrived at Shanghai carrying 695 marines to protect American nationals. The marines will live on board, and at present land only for shore patrols. Reports from American circles indicate that Peiping may surrender to the Communists by negotiation, says the United Press. The defenders of Peiping have withdrawn behind the ancient city w'alls and closed all gates to prevent Communist infiltration.

An Associated Press despatch from Peiping says the Communists have pushed close enough to level cannon on the city, but they have not done so. This fact alone gives impetus to the peace rumours. With guns booming a few miles away, the city is not jittery, but calm. No Change in American Policy

There has been no change in American . policy towards China or in the aid programme as the result of Madame Chiang Kai-shek’s visit, said the Acting Secretary of State, Mr Robert Lovett, in Washington. He also indicated that the United States was doing its utmost under the policies approved by Congress to aid the Nationalist Government.