Introduction

Following the end of World War II, China was plunged almost immediately into a second, even more fateful conflict: the Civil War of 1945–49. In this conflict’s early phases, some of the action took place not on the battlefield but around the negotiating table. This book is about those negotiations, in the context of the developing theatre of war. The received wisdom among historians about these negotiations is that the differences between the two belligerent parties in the Chinese Civil War—the Guomindang (GMD; Kuomintang, or Chinese Nationalist Party) and the Chinese Communist Party (CCP)—were irreconcilable,¹ and that the failure of the peace talks was somewhat predetermined,² not least by virtue of the wholesale failure of US foreign policy towards China,³ exemplified by the Americans’ unsuccessful mediation efforts to establish lasting peace.⁴ A separate set of negotiations was carried out early in this period, in which the GMD government negotiated with the Soviet Union over the recovery of Manchuria. This greatly influenced the subsequent outbreak of the civil war and is often considered in the context of Soviet–US rivalry.⁵

It is a matter of record that the negotiations and agreements that promised to terminate the civil war, de-escalate international tension and simultaneously foster cooperation were all part of a failed attempt at peace. The results seem speak for themselves: a full-scale civil war in China that fed into the rivalry between the Cold War superpowers.

The main interest of this book is twofold. First, it offers an account of what the interested parties were really negotiating about. Second, it provides a reassessment of the early phase of the civil war through the lens of the negotiations. It concerns how the negotiators and mediators strove for progress over the bargaining table when China teetered between peace and war in the immediate aftermath of World War II.

In retrospect, many historians assume that the negotiations were doomed to failure from beginning to end. But negotiations do not take place ‘in retrospect’. At the time, the effort to negotiate a peaceful resolution to the conflict between the GMD and CCP was taken very seriously by all sides. Chiang Kai-shek devoted substantial space in his diary to the ongoing twists and turns of the negotiations and the Communist leaders also discussed them at length in their internal communications. The United States was so committed to the negotiations that it dispatched to China one of America’s most respected and influential figures, George C. Marshall, who had commanded the US armed forces during World War II, to lead the negotiations.

This book reveals how the negotiators understood the nature of their job. Negotiation is not always about assessing the chance of a comprehensive settlement; rather, it is often a series of continuous efforts of seeking even the smallest compromise that could reduce further escalation of the conflict. By moving away from a retrospective outcome-oriented historical analysis, the book shows that the debates, disagreements and compromises of the negotiations are more significant to our understanding of China’s post-war struggle between peace and war than previously thought.

As battlefield correspondent Dewitt Mackenzie noted in 1946, the local dynamics of the Chinese Civil War had turned it into a world threat in light of the totalising view of international politics.⁶ At present, scholars have sought to understand civil wars from a variety of aspects rather than relegating them to the margins of international political studies.⁷ Nevertheless, negotiations to resolve the Chinese Civil War remain a neglected topic.

This contrasts sharply with research into the Chinese Civil War’s battle engagements, which attract enormous research interest. The major campaigns fought after the complete breakdown of the peace talks, particularly the massive operations that occurred in 1948 and 1949, have prevailed in academic discussions of Chinese Civil War history. In part, this is because they are considered decisive for the CCP’s conquest of the mainland and the founding of the CCP-led People’s Republic of China (PRC).⁸

Peace negotiations and war are often two sides of the same coin. World War I, for instance, was ‘a diplomatically botched negotiation’, as American diplomat Richard Holbrooke has said.⁹ If the combat operations of the Chinese Civil War require in-depth analysis, it seems reasonable to ask if there was more to the negotiations than their outcome.

This book examines a number of interrelated themes. While it studies the two civil war rivals’ use of concessions, ambiguous treaties and short-term solutions as negotiation strategies, the book intervenes in the discussion of the American peacemakers’ mediation efforts under conditions of bias. The book goes beyond the often inconclusive debates over infractions of international treaties. It draws attention to the GMD government’s predicament, from a position of weakness, in maintaining a cooperative relationship with the powerful Soviet Union in both treaty negotiations and post-treaty stages. It demonstrates how the Nationalists’ handling of the Soviets at the negotiating table affected their war efforts against the CCP.

As the unfolding negotiation dynamics and the escalation of military confrontation on the battlefield were closely related, this book also explores the military conflicts that ultimately plunged China into what is considered the world’s largest military engagement of the seven-plus decades since World War II.¹⁰ It highlights the contradictory role of political leaders who were micro-managing both military and peace efforts, including their struggle to connect political objectives and military power, rhetorical use of the ‘decisive war’ concept, and the pursuit of radical military and political goals at the expense of a negotiated peace.

These central themes frame this book’s inquiry into a period with an entwined history of warfare and peace negotiations in post-war China until the fighting escalated into a full-blown civil war in 1947. The civil war began in August 1945 when the Soviet invasion of Manchuria¹¹ precipitated the Japanese surrender and ended China’s eight-year-long war against the Japanese invaders. Japan’s sudden surrender in August 1945 reignited the civil war between the ruling GMD, led by Chiang Kai-shek, and its armed opposition, Mao Zedong’s CCP, in a race for post-war territorial recovery, despite their conflict-laden wartime alliance against Japan that had existed since 1937. The two old foes nevertheless entered into the US-sponsored peace talks owing to domestic and international constraints. In a bid to recover Manchuria from Soviet Red Army occupation, the GMD government was simultaneously deadlocked in a negotiating conflict with the powerful Soviets, where it was disadvantaged. The GMD–CCP peace talks gained momentum in early 1946. Progress at the negotiating table kindled hopes for permanent peace in China, which culminated in a truce agreement and a range of multiparty resolutions for a power-sharing government. Hopes for peace were disappointed, however. Escalation of the military situation in Manchuria and China proper¹² quickly ensured that the ceasefire became a dim memory. The peace efforts unravelled in mid-1946 and collapsed completely in early 1947, after the outbreak of full-scale civil war and after the Nationalists terminated discussions with the Soviets over Manchuria.

The conceptual basis of the book

Through studying the negotiations that took place in post–World War II China, this book reviews an abundance of original negotiation meeting records. Despite many of these documents being published, an enormous wealth of knowledge about peacemaking in these records remains relatively unexplored. In particular, the significance of some of the creative ideas proposed by the negotiators to break impasses was not recognised until decades later. Clearly, these ideas are best understood in light of subsequent advances in the study of negotiation.

Notably, some of the negotiation concepts in these records have been mentioned by media outlets using names that have become popular nowadays (e.g. ‘highball tactics’ and ‘third-party intervention’), in accordance with the global use of negotiation and mediation as alternatives to litigation and armed conflict. This book examines these historical negotiation records through the lens of the modern literature on negotiation and mediation. This literature provides a conceptual basis for the book’s historical inquiry, given that negotiation and mediation have never been specialised knowledge intended only for a small group of political scientists, mathematicians and game theorists.

This book cites conceptual studies on negotiation from authors who acquired expertise in studying how conflicts are resolved in a variety of areas and who come from a variety of academic disciplines, including business, law, political science, international relations, social psychology, anthropology and, more narrowly, specific areas such as clinical nursing. These studies provide insights into the book’s historical research about the complex relationships between peace, war and conflict management. Peace negotiations and mediations certainly differ from those that occur in commercial, legal and community disputes, but many basic strategies and tactics—such as seeking mutual concessions and compromises—are pertinent to a variety of negotiation settings.¹³

The writings on negotiation are voluminous. They take different approaches,¹⁴ and tend to highlight one or another aspect of negotiation and mediation.¹⁵ Increased integration and the emergence of new perspectives over recent decades in this vibrant field have blurred the lines that separate different approaches.¹⁶

The massively complex negotiations in the Chinese Civil War simply cannot be understood through foregrounding a particular negotiation ‘style’¹⁷ or the viewpoint of a single side,¹⁸ as in some previous studies. At different times in the Civil War negotiations, as the various parties shifted their ground and the mediators shifted their tactics, one or another of the writings on negotiation becomes most relevant as explanatory analysis, and I will introduce this writing at that juncture of the book.

This book reveals that the raucous haggling at the negotiating table was matched by military decisions and actions on the battlefield. A key component of the book studies these military operations, as what occurred on the battlefield affected the negotiation process. The following chapters show that while the two belligerents tried using the outcomes on the battlefield to gain leverage at the bargaining table, the increasing escalation of conflict injected urgency into negotiations. The existing literature on warfare offers a basis for assessments. However, the book studies a period of Chinese history when the tug of war at the negotiating table and bloodshed on the battlefield reduced every negotiating proposal to a temporary status. As B.H. Liddell Hart noted in his study of military strategy, ‘the one constant factor is that means and conditions are invariably inconstant’.¹⁹

As the unpredictability of war is somewhat inevitable, some of the military decision-making discussed here defies the modern logic of risk-taking. While previous studies on military affairs are useful for studying these decisions, the military decisions of the two antagonists enrich our understanding of wartime fighting, including less studied aspects of guerrilla warfare and the concept of a decisive war.

The historical evidence of the book

This book is about two important aspects of the history of the Chinese Civil War—the military and the politics between the rival parties, as revealed in the negotiations—and primary source materials are at its core. Studies on the history of negotiations are often limited by a lack of historical records,²⁰ but the empirical findings of this book are supported by the availability of many original records of conversations at negotiation meetings, either in the official documented historical record or preserved in the personal diaries and chronological biographies of individual negotiators. With the exception of the editors’ comments in these biographies, the sources present the negotiation strategies and tactics of the negotiators and the mediators without hindsight.

For example, this book reviews the original negotiation meeting conversation records of the GMD–CCP negotiations in late 1945, as documented and approved by both parties.²¹ Despite the complete set of these conversation records²² or synopses²³ of these meeting being published, these documents remain essentially unstudied.

The GMD–CCP negotiations became tripartite in 1946 when the American mediators directly participated in the negotiations and were responsible for keeping detailed conversation records of the meetings. The Americans organised comprehensive clerical services. Two stenographers alternated, conducting live record-keeping in English of the participants’ (or translators’) discussions during negotiation sessions. The two disputed parties received carbon copies of the initial record immediately following the meeting. This was before the record was thoroughly checked and typed in its final form, as a correct record of the conference for all participants to approve. The two belligerent parties were free to arrange their respective Chinese translations from the original English minutes for their own reference.²⁴ The Americans were even responsible for drafting proposals in both English and Chinese in some cases, particularly when the two parties used the Americans as intermediaries to convey demands without holding meetings.²⁵

The complete set of recorded conversations about the US-brokered GMD–CCP peace talks of 1946 was later published in a diplomatic papers series by the US government. Although this set of documents is easily accessible to the general public, an enormous wealth of knowledge within the texts about making peace remains untapped.

Since the 1980s, the PRC has gradually released a significant amount of source material comprising original telegrams, correspondence and internally circulated documents of various types. These have revised and enriched our understanding of the civil war’s history. They were published as documentary collections, personal chronological biographies and the collected writings of individual Chinese statesmen and generals.²⁶ Included in this material is the eighteen-volume selected documentary collection of the Central Committee of the CCP, covering the period of the Chinese Communist movement from 1921 to 1949.²⁷ The collection contains a large number of original documents pertaining to important political and military decisions of the CCP leadership.

This group of historical records is accompanied by a substantial number of personal diaries, memoirs and oral histories on the civil war. The Japanese World War II admiral Takagi Sokichi once took a sceptical position towards the reliability of the official military records,²⁸ and his scepticism should not be overlooked. However, the use of personal diaries, narratives and memoirs in historical studies is not without problems for researchers. Some scholars therefore have based their research entirely on the documents of organisations and governments, on the basis that memoirs and diaries can often be misleading.²⁹ This book takes a more comprehensive approach and considers official records, along with personal diaries, memoirs and oral interview testimonies, as vital primary sources. Together, they form a useful set of cross-references.

Perhaps the most revealing source materials on the Chinese Civil War in the personal records are the personal archives—particularly the diary—of Chiang Kai-shek.³⁰ Many of the political and military leaders of modern China kept diaries, but they created this personal space in various ways. Some of them are just a concise record of events with very little personal feelings about or reflections on what had happened.³¹ Chiang’s personal diaries, which are located today at the Hoover Institution library at Stanford University, are quite different and stand out in their value. I spent many fruitful days at the Hoover Institution reading through them.

Chiang’s voluminous diaries not only keep a record of events but also preserve substantial comments on planning and decision-making, analyses of his enemies and allies, and personal impressions of the occurrences recorded. Chiang was a meticulous diary keeper. The events he recorded and omitted from his diary have the power either to shape or to shade our historical understanding.³² In many cases, Chiang used his diary to review incidents that had occurred months, years or even decades previously. As these diary entries were written with hindsight, Chiang’s diary operates simultaneously as his memoir. Chiang did not write a diary to record the moment; he wrote it for meaning and insight. In this sense, the diary tells Chiang’s version of a story of the world in which he was living, and he was determined to take possession of that world. The style of Chiang’s diary makes for a captivating political biography.³³

Making Chiang’s diary even more interesting and challenging to historians, he compiled lengthy retrospection logs at weekly, monthly and yearly intervals over the period under study. Chiang’s diary also includes a large collection of his written notes. Some of these pieces read more like full-length articles than random notes. The retrospective sections and fragmented pieces of handwriting gave Chiang more opportunity to judge the same issue at several levels of consideration, but they also placed Chiang directly in a world of hindsight and outcome bias. Put simply, a diary entry might disclose Chiang’s initial assessment of an incident right after it occurred, but a different opinion on the same matter might be noted in a retrospection log written a few days later after reflection.

Among the published source materials related to the Chinese Civil War, the recently published major events chronology of Chiang Kai-shek has been an underrated primary source.³⁴ It is a series about Chiang’s personal, political and military life in mainland China from 1927 to 1949. It contains scans of the original handwritten manuscripts by Chiang’s secretaries, comprising a miscellany of documents, including correspondence, telegrams and decrees in chronological order. Excerpts from Chiang’s diaries constitute the narrative text structure.

The chronology’s diary excerpts were heavily edited in order to construct a positive image of Chiang.³⁵ Nevertheless, it remains an important primary source for this book’s research on a number of fronts. First, it retains a considerable number of telegrams and correspondence not available in Chiang’s personal archives currently open to the public. The specificity of these documents gave the compilers of the chronology very little room to alter the original text.³⁶ The incoming telegrams preserved in the chronology are of particular value. Although some of the original/carbon copy drafts of these telegrams may still be found in other related archives, many are not fully dated and readers must refer to Chiang’s chronology for the exact dates they were sent or received. Nevertheless, even a voluminous chronology is unable to fully cover the flurry of handwritten orders, letters and confidential cables that Chiang sent to his subordinates daily. Although a certain amount of this immense bundle of outgoing messages is preserved in Chiang’s personal archives, many of these original documents were either undated or not fully dated. The contextualising words written by the compliers of Chiang’s chronology therefore become a useful tool to verify these records.

Certain sentences in Chiang’s original diaries subsequently were covered up by ink to conceal what he had written, and the current copies of the diaries received further redaction before being opened to public access. The redaction of Chiang’s diaries makes the chronology a vital reference for Chiang’s view of the respective historical incidents. Regarding the redaction of Chiang’s diary and the extensive editing of his major events chronology, this book studies them against the backdrop of historical events and uses them in a more analytical manner, with reference to other historical documents.

While Chiang’s diaries at Stanford are uniquely informative, I also secured valuable primary source materials, including handwritten diaries, through research in the archives at the Rare Book and Manuscript Library at Columbia University in New York. In addition, I found important information in the National Archives of the United States in College Park, Maryland; the Second Historical Archives of China in Nanjing; the archives of the Academia Historica and the Chinese National Army archives at the now defunct Bureau of Historical Compilation and Translation in Taipei.

Structure of the book

This book is not a chronological history of the Chinese Civil War. It is structured chronologically simply to ensure that the complex historical events are comprehensible to readers and that they can easily follow the unfolding historical events and understand how conclusions are drawn at the end of each chapter. To this end, the book’s analytical paragraphs provide the necessary support for the accounts of historical events. Most of these analytical passages and comments are written with reference to (as discussed) current negotiation literature. To meet the above objectives, the book is organised into one introductory chapter, seven content chapters and one concluding chapter.

Chapter 1, ‘Negotiating at an uneven table’, is one of two chapters discussing the Nationalists’ struggle to negotiate with the Soviets over Manchuria, which unfolded against the backdrop of the Anglo-American–Soviet secret deal at Yalta, the Soviet Red Army occupation of Manchuria and the end of World War II. The discussion centres on the Nationalists’ negotiating behaviour in dealing with their stronger Russian opponents. Of particular interest here is the notion that a weak party enjoys fewer margins for error than a strong party in diplomatic negotiations. As Kenneth Waltz argues, the strong ‘can do the same dumb things over again’ and ‘can hold back until the ambiguity of events is resolved without fearing that the moment for effective action will be lost’. In contrast, the weak party manoeuvres ‘on narrow margins. Inopportune acts, flawed policies, and mistimed moves may have fatal results.’³⁷

The chapter begins by looking at how the GMD government sacrificed key national interests in pursuit of a treaty of friendship with the Soviet Union in 1945. Notwithstanding the pragmatic origins of this appeasement policy, the Nationalists went on to clash with the Soviets at the treaty’s implementation stage over the GMD government’s military takeover of Manchuria from the Soviet Red Army, particularly the GMD’s initial landing of troops at the Manchurian port of Dalian (Dairen). The chapter probes how contentious issues involving national pride and territorial sovereignty pushed the weak GMD government to drift from its accommodating negotiation strategy and stumble into an unwanted treaty dispute with the Soviet Union, one it had desperately sought to avoid at the outset.

Chapter 2, ‘Rethinking the Chongqing negotiations’,³⁸ rethinks what are perhaps the most important attempts at making peace in modern Chinese history: the first post–World War II peace talks convened in China’s wartime capital Chongqing in autumn 1945 between the GMD and the CCP. Previous studies treated the American-sponsored peace conference as a sideshow to the subsequent full-blown civil war. Many scholars believe that the Chongqing negotiations were meaningless,³⁹ or, more precisely, that the peace talks are overrated and do not deserve historical prominence.⁴⁰ Maochun Yu remarks that both parties simply went ‘for a reluctant and pretentious peace talk’.⁴¹ Some believe that the leaders of both camps were pressured to prioritise military options; this implies that war became the dominant theme and that negotiations were of secondary importance.⁴² The focus of this chapter, however, is not the two belligerent parties’ initial intent to enter talks but the interaction dynamics over the negotiating table that shaped the negotiation process of the Chongqing peace talks. The chapter’s conclusions overturn previous scholars’ preconceptions.

The chapter begins with a brief overview of the intertwined prior history of the two civil war rivals’ on-going armed conflicts, peace initiatives and their fragile anti-Japanese alliance, from the late 1930s through to the end of World War II. The two antagonists engaged in comprehensive peace talks against the backdrop of these changing domestic and international environments. It finds that while the two parties fought each other fiercely on the battlefield, they adopted unsystematic piecemeal solutions to prevent the armed conflict from spreading and to avoid the complete breakdown of their wartime cooperation. Although the post–World War II race for territorial recovery between the two triggered a new bout of civil war, the chapter shows that a peace deal was needed for both parties in the post-war environment. Therefore the real challenge for the two belligerent sides and their American mediator during the peace talks in Chongqing was not securing peace in China once and for all. Rather, it was whether they could pick up where the two parties had left their awkward wartime alliance.

The core of the chapter examines hitherto unexplored aspects of the negotiations in Chongqing in 1945: the debates, disagreements and compromises, and the American mediator’s attempt, from an inherently biased position, to alter the dynamics of the peace talks. It contends that the history of the Chongqing negotiations, although they lasted only six weeks, is more important to our understanding of China’s struggle between peace and war in the post–World War II era than previously acknowledged.

The two belligerent parties reached an interim peace accord in October 1945 at the end of the Chongqing negotiations, and agreed to continue negotiations to find a more permanent resolution. Both sides seemed eager to prove that negotiations could still proceed even as fighting continued, particularly in the region the treaty did not mention: Manchuria. Chapter 3, ‘The civil war in the north-east’, focuses on the race between the two belligerents to repossess Manchuria. It investigates the military decision-making of both parties when they met on the battlefield, in a region where troop deployment proved logistically challenging. It reconsiders two common beliefs about the onset of the Chinese Civil War. Some believe that if Chiang had not gambled his best troops in Manchuria but had rather sent them to the North China battlefield at the outset, the Nationalists’ debacle in China could have been avoided.⁴³ Others argue that had Chiang driven his armies to Manchuria more quickly, they would have fared more successfully.⁴⁴ This chapter addresses important and hitherto unstudied military documents and finds that both beliefs about Chiang’s decision-making in 1946 are moot points: the Nationalist strategists and their American advisers had already thoroughly debated and decided on the best military strategy for the GMD in Manchuria in 1945.

A second popular notion emerges from previous studies’ rather loose use of the term ‘decisive war’ in attempts to offer a parsimonious explanation of the CCP’s civil war strategy.⁴⁵ Claims have been made that Mao tried to push his armies to conjure up ‘a single, climactic decisive battle’⁴⁶ against Chiang’s elite corps in Manchuria in the winter of 1945, which some believe represented a turning point in Mao’s military thought.⁴⁷ This chapter explores the contradictory role of political leaders in war management and contends that while Mao was not a perfect military planner, he did not order his armies to launch a final decisive battle against the Nationalists’ US-armed armies during that period. Although Mao used the phrase ‘decisive battle’ in his proclamations, this was merely political rhetoric designed to construct an atmosphere of optimism at the beginning of the war.

Chapter 4, ‘A shattered peace’, probes the much-discussed yet little-understood mission of General George C. Marshall of the US Army to mediate an end to the Chinese Civil War. Previous studies have treated the mission and the ambiguous agreements it endorsed as manifest failures. One widely held assumption among scholars has been that Marshall’s effort to mediate the end of the Chinese Civil War was doomed to failure from the start due to ill-formulated targets at the mission’s outset. The US support of the Nationalist regime via military aid, the attempt to induce a GMD–CCP reconciliation for a democratic government and the reluctance of military involvement in support of American policy objectives in China were shown to be self-contradictory and untenable.⁴⁸ It is also believed that the deterioration of relations between the Soviet Union and the United States at that time did more to hasten the collapse of the mission.⁴⁹ Even those who do not believe that the failure of the Marshall mission was predetermined argue that the collapse of the mission lived on in Truman’s pre-set policy choices on China.⁵⁰ The criticisms about Marshall’s failure are merited in the realm of foreign policy studies, but they all face ‘the danger of ascribing greater consistency and internal cohesiveness to a policy than it may actually have had’.⁵¹ As Tang Tsou admitted, many of these hypotheses can be neither proved nor disproved.⁵²

Three distinctive aspects set this chapter apart from the existing literature. First, it explores the interplay between Marshall and his Chinese counterparts at the negotiating table. Second, the chapter studies Marshall’s attempt to use his biased mediating stance as leverage in his push for agreements and the two biggest threats he faced: the propensity of the belligerent parties to want to get a bigger piece of the post-conflict pie at gunpoint, and discontent over the implementation of ambiguous agreements. Third, the chapter studies the Political Consultative Conference—a multiparty peace forum that Marshall did not intend to involve—and the ambiguous resolutions it adopted. The chapter contends that the ambiguously written agreements made it possible for a compromise resolution to the conflicting interests of the CCP and the GMD. Ambiguous treaties are not uncommon in peace negotiations, but the chapter highlights the significance of continuing efforts from all signatory parties to build a cooperative post-treaty relationship by eliminating the possibility of exploiting ambiguities within the agreements for partisan purposes.

While China was experiencing a troubling escalation of GMD–CCP military conflict in the north-east, the GMD leaders had a fight on their hands over the dispute with the Soviets regarding the possession of former Japanese industrial assets, minerals and energy resources in Manchuria. The Soviets were dismantling these and sending them to the USSR. The disagreement was a moot question that had no direct bearing on the issues being discussed during the treaty of friendship negotiations between the two governments. However, it initiated a dangerous slide towards a new round of disputes in the backdrop of the GMD–Soviet political tussle over Dalian. The Soviets regarded all enemy assets as war booty of the USSR’s Red Army, but the Nationalists claimed the wholesale confiscation of Japanese-owned properties as war reparations to China. As will be observed, the Soviets offered, amid a negotiating stalemate, to negotiate an exclusive joint venture enterprise in cooperation with China for all major Manchurian industries and mines.

Chapter 5, ‘Planting radishes in the desert’, continues to explore the Nationalists’ experience against the stronger Soviet opponents at the uneven negotiating table: their disagreement with the Soviets over former Japanese factories and other Japanese assets in Manchuria that the Soviets were dismantling and shipping to Russia, which sparked a dangerous slide towards a new round of disputes. Previous studies have argued that the Soviet Union was fundamentally hostile towards the Chinese Nationalist government and hinted that what Moscow actually sought was to establish neo-colonialist economic domination over this key Chinese region.⁵³ This chapter tells an entirely different story. The Soviets were unwilling to escalate the conflict even when facing the Nationalists’ hostile acts, and Moscow was evidently less interested in rolling the dice to determine war. The chapter examines the transitional arrangements hatched by the GMD leaders that attempted to break the impasse, particularly Chiang’s intriguing multi-billion GMD government-issued Circulating Currency for the Nine Provinces of the North-East (Dongbei jiusheng liutong quan 東北九省流通券) cash pay-out plan, ignored by existing scholarship. Analysing hitherto little studied historical records, the chapter shows that the dispute’s complexity was greater than it appeared and that elements of common interest for an economic joint-venture deal between the two disputants were never beyond reach.

Without workable post-treaty relations with the Soviet Union, the GMD forces failed to secure a cooperative takeover from the withdrawing Soviet forces in Manchuria. The CCP captured Manchurian cities along the main railway with ease, including the transportation hub of Sipingjie. When Chiang sent his elite corps to capture the city, the two warring parties clashed in the first major battle of the Chinese Civil War. The civil war in Manchuria, fought on the cusp of spring and summer in 1946, has long attracted attention from scholars and writers alike. It fascinates many, in part because the Chinese Communists seemed to be moving away from their signature mobile guerrilla warfare strategies, instead massing troops in positional warfare during this period. By the time their success seemed unlikely, Mao ordered his troops to make a protracted defence of Sipingjie, citing the Republicans’ defence of Madrid during the Spanish Civil War of 1936–39 as a parallel to the Chinese struggle. Chiang, on the other hand, mobilised his best troops in a bid to wipe out the enemy and take control of large cities along the main rail transport artery. Both Mao’s vision and Chiang’s military gamble were, however, negated by reality. The battle concluded in May 1946, but this was an anti-climax. While Mao’s forces staged a morale-sapping withdrawal after suffering disproportionate casualties, Chiang’s crack troops not only failed to eliminate the enemy’s main forces but were also stretched painfully thin.

A thriving scholarly literature on the 1946 battle of Sipingjie has emerged in recent years. Although some consider the battle a missed opportunity for the GMD to completely eliminate the CCP’s Manchurian field forces,⁵⁴ a number of analysts have studied the battle from the perspective of the CCP leadership’s decision-making. Some believe the battle was just a miscalculation of the CCP leaders in their decision-making, but some severely criticise Mao’s enthusiasm for following Moscow’s instructions.⁵⁵ Alternatively, some blame Mao’s field commander Lin Biao for his command failures⁵⁶ and for clouding Mao’s judgement,⁵⁷ and argue otherwise: that the battle was fought under ‘unique’ political and historical conditions, exonerating Mao for its failure.⁵⁸ A synthesis study finds that a number of normative and material factors, as highlighted by Mao’s ‘Madrid’ analogy, had led to an increased acceptance of risk among the CCP leaders at the onset of the Chinese Civil War.⁵⁹ Recent research on the battle of Sipingjie emphasises the significance of a symbolic ‘Madrid’ in Mao’s strategic behaviour.⁶⁰

Chapter 6, ‘China’s Madrid’, studies the transition from the breakdown of ceasefire negotiations to the escalation in fighting in Manchuria. It brings a new perspective to the battle of Sipingjie, against the backdrop of the loss of prestige of the US-sponsored truce supervision system. It demonstrates, for instance, that Mao’s strategy in this period shifted from the paradigm of offensive accommodation to a defensive accommodation mode of warfare, and a plan for defending the status quo, before moving into a quasi-withdrawal appeasement approach. Chiang, on the other hand, relied on an ultra-conservative war plan merely to exert symbols of power for his government in Manchuria. The events in Manchuria suggest that the GMD was incapable of winning a full-blown civil war against the CCP, but Chiang’s tough stance proved to be an obstacle for Marshall’s continued efforts to broker a political settlement.

Chapter 7, ‘Towards an all-out civil war’, starts in mid-1946 when the escalation of military confrontations finally drove China into a full-scale civil war. It examines the growing scepticism of the two belligerent parties regarding prospects for the peace talks, which helped to ensure that the fighting quickly developed into an unlimited civil war. In examining some of the most brutal battles of this period, which tore off the ideological masks of the two armed factions and revealed their military core, this chapter discusses how leaders of both warring parties and their American mediators were almost simultaneously held hostage by the war. Studying the US arms embargo, designed to curb Chiang’s military ambitions, the chapter contends that no single country in the post-war Western bloc could prop up the Nationalists’ huge army.

When the collapse of the negotiations seemed imminent, minor parties across China’s left–right political spectrum formed a coalition, entering the peace talks as messengers of peace in the dying days of Marshall’s mediation mission in late 1946. The coalition’s plea for peace was unavailing. Previous studies of the group’s mediation efforts attribute its failure to influence the negotiation outcome to the internal weaknesses of the group regarding certain issues, including the motivations behind their prioritisation of their own interests, a lack of mass public support, and military power.⁶¹ This chapter refers to a renewed ‘veto players’ concept, initially developed for analysing political institutions in the study of multiparty bargaining in civil wars. It treats the coalition as un-armed legitimate signatories of the resolutions adopted by the Political Consultative Conference, whereas the two heavily armed major parties, who possessed military power strong enough to veto peace accords unilaterally and fight again, were the only two ‘veto players’ in the Chinese Civil War.⁶² The final mediating efforts by the minor parties were cut short by the intense political manoeuvring of the two major parties. The chapter examines the difficulties in accommodating the political and military ambitions of the two major parties to the multiparty bargaining environment and shows how these obstacles motivated them to plunge deeper into all-out war.

The final chapter, ‘Conclusion’, summarises the themes that have emerged in the book and explores the book’s main arguments in further detail.