893.00/5–847: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received May 8—2:05 a.m.]
990. As previously reported, Central Government military situation has shown steady deterioration within recent weeks. In North Shensi, Central Government forces have become over-extended since capture of Yenan and considerable difficulty was encountered in capture of Suiteh. Micheh has not yet fallen to Nationalists although its fall has been repeatedly reported as “imminent” for some weeks.
On May 1 in report on military affairs to Legislative Yuan, Pai Chung-hsi78 stated that forces had been withdrawn from South Shansi for Yenan and North Shensi campaign. As result, Communist forces [Page 113] in South Shansi have been increasingly active recently and appear to be enjoying considerable success. The critical state of situation in Shansi is indicated by General Yen Hsi-shan’s appeals for Central Government military assistance.
Shantung, however, is for the time being the most critical area. In that province Central Government suffered another serious reverse with loss of Taian on April 24 (reference Embassy’s telegram 941, May 1, 7 p.m.). It is not known exactly how much material was lost by Central Government at Taian but there have been reliable reports that Central Government had been using city as a staging and supply area. Other reports indicate that situation in Shantung has also been affected by explosions in ammunition dumps at Hsuchow.
On May 3 Generalissimo flew to Hsuchow, Lini and Tsinan, assumably for purpose of rallying Central Government forces in Kiangsu-Shantung area. He returned to Nanking on May 5. It now seems likely that as result of his visit counterattacks from Tsinan have been launched. Vernacular press on May 7 carried reports that Taian and Feicheng had been recaptured by Central Government units. There are no indications, however, that important Communist strength has been pinned down and destroyed.
Situation in Manchuria is for time being quiescent but as indicated in Embassy’s telegram 965 of May 4, 4 p.m.,79 there is little room for optimism with regard to overall military situation. Recent reports indicate Communist concentration of forces north of Kirin in Yushu area.