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

by Rana Mitter

The Nationalist wartime economy did show promise. Prior to the outbreak of war, China had not been self-sufficient in food, and had regularly imported millions of tons of grain and rice, largely from Southeast Asia. During the first years of the war, rice imports were increased, the purchase price of rice in major cities in Free China remained broadly stable, and farmers were reasonably prosperous. Luck played some part in this; for the first two years of the war, fine weather meant plentiful harvests. However, the government also instituted reforms that contributed to productivity, including the use of refugee labor, the application of modern pesticides, and the supply of loans for agricultural collectives. The result was relative stability in food supply: up to 1940, crops of rice and wheat, as well as many other major crops, remained constant.27 Still, the Nationalists’ efforts to create a state with welfare responsibilities while fighting a war were expensive, and Chiang’s government was cash-strapped. Between 1937 and 1939 annual government revenues fell by 63 percent, whereas expenditure increased by 33 percent. Many of the major sources of state revenue, most notably import duties collected by the Chinese Maritime Customs, were lost when the National