"The Communist victory in 1949 was mainly a result of the economic incompetence of the GMD." How far do you agree with this statement?

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“The Communist victory in 1949 was mainly a result of the economic incompetence of the GMD.” How far do you agree with this statement?

It has been argued that the GMD been finally finished off by the economy problems that it was facing.  By 1937 prices began to rise out of control and 65% of the budget was met by the currency expansion that had been introduced and only 10% was met by taxes.  To help overcome this problem Chiang borrowed money and printed more paper money, consequently there was an extreme fall in the value if the Chinese currency. Chiang began to depend on foreign aid.

The GMD began spending huge sums of money on fighting with the CCP and gathered vast debts that they were unable to repay.  The GMD reliance on foreign aid, the US military and financial support has huge.  Therefore the GMD were hit really hard by the withdrawal.  By the constant depreciation in the value of paper money, the morale was undermined through all the classes which were dependant on salaries (troops, officials, civil officers).  By 1949 China’s economic system had collapsed and the government was discredited, and the nationalised were demoralised. The GMD’s reliance on foreign aid, being the US military and financial support was huge, therefore the GMD were hit really hard by the withdrawal of this.

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The war against Japan in 1937 played a part in the downfall of the GMD, therefore doesn’t agree with the statement.  In 1938 Japan controlled most of the northern Chinese railways; the GMD weren’t seen as doing anything, whereas the CCP were trying to fight the Japanese invasion.  Therefore it was seen that the CCP had launched a more effective resistance against the Japanese as oppose to the GMD.  The GMD were regarded as a nationalist force which had refused to accept the humiliation of the Japanese invasion so instead just sat back blissfully in watched.

The CCP had many ...

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