Forgotten Ally: China's World War II, 1937-1945

by Rana Mitter

Nonetheless, the Nationalist blockade continued, with disastrous effects on the economy of the Communist base area. Then, in early 1940, Chiang terminated the financial subsidy from the Nationalists. Making matters worse, after very good harvests during the first two years of the war, the yields in 1939 and 1940 were much poorer. The bad harvests also created problems for the Nationalists, as the food price index in Chongqing rose by nearly 1,400 percent in 1940–1941.30 But prices rose in the isolated and impoverished SGN area: in 1941 one needed 2,200 yuan to buy what would have cost 500 yuan in 1940.31 The CCP now had a much larger population to deal with, and severely reduced resources. The solution they turned to was a radical form of economic self-sufficiency. “Production campaigns” were launched which over the next few years would greatly increase the amount of land that fell under cultivation, as well as boosting the production of cotton, rearing of livestock, weaving of cloth, and extraction of products including salt, coal, and even some oil and gas.