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By Root 1579 0

Chinese lost what was left of their fortunes when the Nationalist government, attempting to impose strict control over the nation’s money supply, asked its citizens to exchange their gold and foreign currency for government certificates. The result was hyperinflation. In 1947, the government issued at least 10,000 billion Chinese dollars in bank notes. Within one six-month period in 1948 prices soared by a factor of 85,000. A sack of rice priced at 12 yuan in 1937 cost 63 million yuan by August 1948. Shoppers pushed heaps of paper currency in wheelbarrows just to buy a few groceries. When a Guangdong paper mill recycled “eight hundred cases of notes ranging from one hundred to two-thousand-dollar bills which it used as raw material in the manufacture of paper,” it was reasonable to conclude that KMT currency was literally worth less than the paper it was printed on.

Among those who saw their wealth evaporate were many Chinese Americans. After the happy resolution of World War II, thousands of ethnic Chinese, both American- and foreign-born, left the United States to visit relatives in China. Some brought their entire life savings, eager to launch new companies or to retire, only to watch their nest eggs disappear within months. In 1947, for instance, a Houston businessman of Chinese heritage returned to Canton to open a travel agency and rice company. Rampant inflation ravaged his savings, leaving him bankrupt and forcing him to return to Houston to start over again. Another Chinese American deposited $6,000 into the Bank of China, in mainland China, in 1948. A year later his funds were worth scarcely enough to buy a postage stamp.

As the Nationalists were forfeiting the confidence of the people, the Communists were rapidly gaining stature in north China. When Soviet forces withdrew in the summer of 1947, the Communists began to consolidate control over Manchuria, employing well-honed skills in educating those under their control to look at the incipient civil war as a class struggle. As committed recruits expanded the Communists’ numbers, Chiang’s forces were being depleted by a growing discontent within the military that reflected the discontent within the general population. During both World War II and then the Chinese civil war, the KMT exempted young men of privilege from the draft while conscripting sons of peasant families. Ill fed, ill equipped, ill paid, and physically abused by their superiors, many of these Nationalist soldiers deserted at the earliest opportunity, often switching sides to join the Communists. By 1948, the Communists had 1.5 million troops—and each new victory brought more men and arms over to them.

During this period, some upper-class Chinese, alarmed by the successes of the Communists, began to leave the country. But most, even among the wealthy, did not emigrate immediately. For it is a reality universally acknowledged that to leave one’s community, to abandon one’s business or profession, to discard whatever wealth and status has been achieved over a lifetime and start all over again in a new country requires uncommon courage and resolve. For the majority of upper-class Chinese, it seemed better to sit tight and hope what they were witnessing was a transient political aberration, nothing more, and that everything would soon settle back to normal.

As 1948 slid into 1949, the Communists destroyed KMT forces in the north and then turned south into central China. One by one, major regions fell under Communist control: Shenyang, Manchuria, Tianjin, Beijing. In April 1949, the Communists seized Nanjing, the Nationalist capital, and in May, Shanghai, the country’s most populous city. There was no longer any doubt which side would be the victor.

Much of what remained of the establishment—bureaucrats, businessmen, intellectuals—now left in great haste. Abandoning businesses, homes, and real estate, they sewed gold bullion and jewelry into belts and seams of clothes, even shoes, and shoved their way onto trains so mobbed that people clung to the tops and sides of the railway cars in order to get