Franklin D. Roosevelt, through General Stilwell, privately made it clear that they preferred that the French not reacquire French Indochina (modern day Vietnam, Cambodia, and Laos) after the war was over. Roosevelt offered Chiang Kai-shek control of all of Indochina. It was said that Chiang Kai-shek replied: "Under no circumstances!".
After the war, 200,000 Chinese troops under General Lu Han were sent by Chiang Kai-shek to northern Indochina (north of the 16th parallel) to accept the surrender of Japanese occupying forces there, and remained in Indochina until 1946, when the French returned. The Chinese used the VNQDD, the Vietnamese branch of the Chinese Kuomintang, to increase their influence in Indochina and to put pressure on their opponents. Chiang Kai-shek threatened the French with war in response to maneuvering by the French and Ho Chi Minh's forces against each other, forcing them to come to a peace agreement. In February 1946 he also forced the French to surrender all of their concessions in China and to renounce their extraterritorial privileges in exchange for the Chinese withdrawing from northern Indochina and allowing French troops to reoccupy the region. Following France's agreement to these demands, the withdrawal of Chinese troops began in March 1946.
Losing Mainland China
Treatment and use of Japanese soldiersIn 1945, when Japan surrendered, Chiang's Chongqing government was ill-equipped and ill-prepared to reassert its authority in formerly Japanese-occupied China, and asked the Japanese to postpone their surrender until Kuomintang (KMT) authority could arrive to take over. This was an unpopular move among a population that, for many, had spent more than a decade under often brutal foreign occupation. American troops and weapons soon bolstered KMT forces, allowing them to reclaim cities. The countryside, however, remained largely under Communist control.
For over a year after the Japanese surrender, rumors circulated throughout China that the Japanese had entered into a secret agreement with Chiang, in which the Japanese would assist the Nationalists in fighting the Communists in exchange for the protection of Japanese persons and property there. Many top nationalist generals, including Chiang, had studied and trained in Japan before the Nationalists had returned to the mainland in the 1920s, and maintained close personal friendships with top Japanese officers. The Japanese general in charge of all forces in China, General Okamura, had personally trained officers who later became generals in Chiang's staff. Reportedly, General Okamura, before surrendering command of all Japanese military forces in Nanjing, offered Chiang control of all 1.5 million Japanese military and civilian support staff then present in China. Reportedly, Chiang seriously considered accepting this offer, but declined only in the knowledge that the United States would certainly be outraged by the gesture. Even so, armed Japanese troops remained in China well into 1947, with some noncommissioned officers finding their way into the Nationalist officer corps. That the Japanese in China came to regard Chiang as a magnanimous figure to whom many Japanese owed their lives and livelihoods was a fact attested by both Nationalist and Communist sources.
Conditions during the Chinese Civil WarFollowing the war, the United States encouraged peace talks between Chiang and Communist leader Mao Zedong in Chongqing. Due to concerns about widespread and well-documented corruption in Chiang's government throughout his rule (though not always with his knowledge), the U.S. government limited aid to Chiang for much of the period of 1946 to 1948, in the midst of fighting against the People's Liberation Army led by Mao Zedong. Alleged infiltration of the U.S. government by Chinese Communist agents may have also played a role in the suspension of American aid.
Dai Li, was both anti-American and anti-Communist. Dai ordered Kuomintang agents to spy on American officers. Earlier, Dai had been involved with the Blue Shirts Society, a fascist-inspired paramilitary group within the Kuomintang, which wanted to expel Western and Japanese imperialists, crush the Communists, and eliminate feudalism. Dai Li died in a plane crash, which was suspected to be an assassination orchestrated by Chiang.
Though Chiang had achieved status abroad as a world leader, his government deteriorated as the result of corruption and inflation. In his diary on June 1948, Chiang wrote that the KMT had failed, not because of external enemies but because of rot from within. The war had severely weakened the Nationalists, while the Communists were strengthened by their popular land-reform policies, and by a rural population that supported and trusted them. The Nationalists initially had superiority in arms and men, but their lack of popularity, infiltration by Communist agents, low morale, and disorganization soon allowed the Communists to gain the upper hand in the civil war.