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Labor Action, 20 December 1948


Jack Brad

U.S. Hints at Plan to Make Deal with Chinese Stalinists


From Labor Action, Vol. 12 No. 51, 20 December 1948, pp. 1 & 4..
Transcribed & marked up by Einde O’Callaghan for ETOL.


While the armies of Chinese Stalinism continued the grinding up of the last masses of trapped Nanking forces, the real decisions were being made in the political centers. The frigid treatment given to Mme. Chiang in Washington is clarified by the remarkable statement made in Shanghai by Paul G. Hoffman, Marshall Plan Administrator and World Economic Plenipotentiary of the United States.

The Hoffman statement indicated that the U.S. would be willing: to deal with a Stalinist “coalition government” in China, though not with a completely CP regime.

[As we go to press, the N.Y. Times reports that “the State Department sought to make it clear” that “Hoffman spoke for himself alone.” It seems reasonable to interpret this as being only a formal disclaimer behind which Hoffman’s trial balloon can be observed for results. Thus also, the current issue of U.S. News & World Report confirms the acceptance in Washington of Hoffman’s approach. – Ed.]

Hoffman’s statement makes clear the implications in the reception to Mme. Chiang. It is probable that the policy he announced in Shanghai reflects what was decided in Washington before her arrival. It is certain that American military and business circles in China conducted preparatory meetings last week, before and since Hoffman’s arrival, at which the policy Hoffman brought from Washington was discussed and largely affirmed.

Already last week’s N.Y. Times dispatches from Shanghai were saying about Hoffman’s arrival: “Since most American businessmen here want to stay, they favor a continuation of the aid program. For the same reasons these Americans, who normally are of Rightist inclination, are now hoping that Washington will soft-pedal any aid to Nanking.” Hoffman’s announcement fits in closely with these sentiments.

Brutally Frank

What is remarkable is the brutal frankness with which Hoffman has announced the abandonment of the Kuomintang government of Chiang Kai-shek. In a statement filled with hedges and ambiguities this is made unmistakably clear. Hoffman says: “The principal purpose of ECA is to help the people.” The fact that this altruistic aim has been formalized in a specific treaty with Chiang; that the U.S. is bound to recognition of this dictatorial, corrupt and unpopular regime by scores of agreements; or that up to eighteen months ago the U.S. was actively sending arms to Chiang; or even that in the past three years the U.S. has granted aid totaling 4½ billions – all these considerations are dissolved in the Realpolitik of the moment. There will be good reason for Nanking to define this new U.S. policy as a stab-in-the-back to Chiang. Thus ends the cold war against the Kuomintang regime which began with the failure of Marshall’s mission in early 1947.

Hoffman clearly offered the olive branch to the Chinese CP and stated the conditions under which the U.S. will do business: “If a government was set up that gave hope that conditions did exist that would continue free institutions, I think our government would be in a position to continue aid.” Thus the first condition is a coalition regime in which some of the political groupings supported by U.S. are included. Rumors are current that., U.S. favors inclusion of General Ho. present defense minister, or of Marshall Li, vice-president, in a Stalinist coalition.

As a down payment and indication of good will, Hoffman stated that the U.S. will not reroute those ships at present slated for cities in CP hands or about to fall to it. There are about 10,000 tons of wheat and other food at present en route to such cities. This huge food supply is also intended to tempt the CP to accept Hoffman’s terms, which include U.S. supervision of all ECA expenditures in China.

When this statement of policy is juxtaposed with the reputed entreaties of Chiang for a declaration in his own favor (for its morale value), the full meaning becomes clearer. The new U.S. policy is not only an abandonment of Chiang and an offer to the CP but a call to all pro-U.S. elements in the Kuomintang, all the vacillators and opportunists, to leave the sinking ship. It is a call to defeatism with reference to Nanking.

Basis of U.S. Hopes

It is no wonder that peace rumors are beginning to replace all other political thinking in Kuomintang China. For the Hoffman policy is a reiteration in new terms of the Marshall policy of 1946. At that time also, the U.S. sought a coalition of the Kuomintang and the CP. Today the balance has shifted in favor of the CP. Yet if the U.S. can bring a conclusion to the civil war, and by ousting Chiang and the CC (right wing) clique of feudalists bring to power in the Kuomintang a pro-American group which will join with the CP. in coalition, the U.S. will for the first time have a political group of its own, and therefore a political instrument with which to work out and implement a China policy.

In this sense, while Washington is defeatist toward the Chiang-feudalist section of the Kuomintang which is dominant, it seeks to rally the bourgeoisie and the anti-feudalists into an effective political bloc. The present disaster of Chiang’s party may prove the occasion for U.S. implementation of its long-desired program for China in this one sense, while in other ways it shares the disasters.

What makes Washington offer Marshall Plan aid, i.e., anti-Stalinist, anti-Russian aid, to a Stalinist-led regime is the hope that with time it can develop a political group of some strength which it can extend and control. No other alternative probably exists except to “write China off.” If anything is to be salvaged at all, sacrifices must be made. Chiang is the first sacrifice and ECA aid would be the second. There is also the hope of a “Titoist” development in Chinese Stalinism.

This hope rests on definite considerations. The British, for example, have made all sorts of secret and roundabout overtures to the Chinese CP in recent weeks. Lacking the odium which attaches to the U.S. in China, the British have offered to continue and even expand trade and business in Stalinist areas. This is one straw in the wind. From the other side came the ubiquitous missionaries with tales of CP protection and continuation of their work.

Protect Property

More important is the protection given to all foreign properties in CP- captured Mukden. Even U.S. property has been carefully guarded against any molestation and foreign business has been urged to continue. The CP program clearly states: “Trade and industry should be given protection, including those owned by landlords and rich peasants.” This is the first point of the industrial policy published by the CP. In addition it has raised, the slogan: “Factories to the owners” – that is, it gives back to the original owners factories taken over by the Kuomintang. This policy has actually been carried out in numerous instances.

The China Digest, CP Hong Kong organ, states (October 5, 1948):

“While the Kuomintang arrests businessmen and confiscates their properties under its so-called currency reform and emergency economic measures, businessmen in liberated areas are being aided by the democratic governments to revive and develop their private enterprises.”

In spite of our own preconceptions this is a fair description of what is happening. The reasons for it and the tendencies it indicates require analysis. Suffice to indicate now that it is not enough to simply describe Stalinism by rote and be done with it.

The U.S. appears convinced that this industrial policy, which fully extends to foreign enterprises, indicates that the Chinese Stalinists recognize the need to trade with the West, to get capital, spare parts for the thousands of U.S. machines, steel, food, etc., and that they are willing to bargain for these necessities. If it can feed these needs and amplify the channels that such relations could open up, it hopes to nurture the seeds of Titoism. Meanwhile, if a group of its own is in coalition with the CP, it has an additional tool to work with and bargain with.

These are some of the tendencies of U.S. policy, but it would be erroneous to accept them at face value as a fixed direction. There are too many “ifs” and conditions involved. What has been described above is not a policy but part of the wait-and-see, trial-and-error fumbling for a policy in which the U.S. is engaged in China. There are other possibilities. For example, rapprochement may not be feasible with the CP or a pro-U.S. group may not develop in time, or a CP conquest may acquire such a tempo as to cut down to zero the power of any group which entered such a coalition. After all, at this moment the Kuomintang still has South China to offer; but what if this falls like an overripe fruit without a struggle?

Hoffman’s statement, therefore, is full of hedges against the main line indicated above. For example, aid to local governments is not excluded by his formula. Nor is his statement a pledge to the CP; it is a statement of conditions which need compliance. Nor will U.S. accept just any coalition at all with the CP. Washington is not interested in coalition as such; it is vitally interested in having certain groups in a coalition.

The Hoffman policy indicated the low state to which U.S. fortunes have fallen in Asia. Evolution of U.S. policy has forced it to stick to the Marshall formula of 1947 but under infinitely more adverse conditions. The question now is: Will the CP accept? Is its necessity as great as the U.S. judges it to be, and is its freedom of action wide enough? In any case Chinese Stalinism requires the most careful study for Marxists; it does contain many unique features.

There is also the question, of course, whether Congress would support such a policy with appropriations, especially in view of the current anti-Stalinist hysteria.

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