893.00/12–1448: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received December 15—2:57 p. m.]
2516. From all indications, it appears that present battle Pengpu–Hsuchou area is entering final stage with early Communist victory assured. Communists have virtually eliminated two Government Army groups southwest Hsuchou and can move overwhelming forces against remaining Government Armies vicinity Pengpu and Pukow, thus clearing north bank Yangtze from Anhui border to sea, except for scattered Nat. groups. Usually reliable sources report that Communist forces include Nationalist units captured at Tsinan and Techow, as well as elements of former Nationalist Seventh Army group under Huang Po-tao, which was eliminated by Communists in early stages of campaign.
Government armies Nanking-Shanghai area have recently been re-enforced by at least two divisions from Hankow, but great part garrison troops this area are of inferior quality and total strength greatly inferior to forces Communists can muster. In view Communists numerical preponderance and status their equipment, they have capability cross Yangtze in force with little prior preparation as soon as clean-up north bank completed. Occupation Nanking-Shanghai area could follow shortly thereafter, since Nationalists’ defensive capabilities relatively slight.
As far as we are aware, Government has no firm plans evacuate capital (Embtel 2502).12a Most likely prospect is that Government will attempt move Canton in disorderly flight when Communists cross river, and Generalissimo, in capacity as commander in chief armed forces, will move Nanchang, where preparations have been made establish field headquarters Nationalist Army. Diplomatic corps will probably be invited accompany Government to Canton.
Takeover Nanking-Shanghai area will probably be accomplished by Communist military and local Communist underground, assisted by certain official and non-official local groups who plan remain through occupation. In Shanghai efforts apparently being made by elements Chinese community and foreign businessmen insure takeover occurs on orderly basis, with minimum destruction property and loss of life. Greatest potential danger foreign and Chinese lives and property lies in occurrence Nationalist-Communist hostilities in metropolitan areas, in riotous conduct retreating Nationalist garrisons and in possibility Government will try sabotage installations and destroy [Page 642] property on abandoning cities, with Communists’ underground attempting prevent such sabotage and destruction. Prevention or reduction in seriousness such conditions might conceivably be achieved if local groups can influence Nationalist Military conduct no hostilities within cities and withdraw forces in orderly manner, and if cooperation exists between these local groups and Communist underground. Cooperation will, in turn, depend on ability groups or individuals in community produce necessary leadership “organize” this situation. As Department is aware, (Shanghai Contel 2727, repeated Nanking 294613), beginning being made along these lines in Shanghai area. So far as is known, there is no similar activity Nanking.
Prospects of Government, even if able move Canton, are not bright. Since northern expedition Kmt has been identified with Nanking and has generally been known throughout country as sponsor of “Nanking Government”, its flight from capital would be generally accepted as loss of its mandate. From all indications, it will be most unwelcome at whatever site it chooses as home. Consulate General [at] Taipei has reported opposition Taiwanese to movement government personnel, organs and mainland refugees, and it appears likely that Taiwanese may react this situation by rebellion. Also transplanted Government would be equally unpopular Canton. Recently received reports from controlled American source that Chang Fa-kwei, now in Canton, is in contact with Hong Kong dissidents and Communists for purpose planning armed opposition to Government when it reaches Kwangtung. Source states dissidents and Communists now control much of province and have capability cut and hold Canton–Hankow, as have around Kukong area, thus isolating Canton from north. Given these conditions, and fact that Government would move without much of its essential administrative apparatus, it is difficult foresee just how, in its new location, it would retain any attributes stability or be able effect control far beyond Canton city limits if, in fact, it could maintain authority even in Canton itself. We might find ourselves confronted with the problem of recognizing new Government that area willing to carry on resistance to Communists rather than continuing recognition of refugee Kmt Government.
In present situation, Communist military timetable apparently well ahead their political plans due rapid, unforeseen national military disintegration. Representatives Hong Kong dissident groups, currently conferring with Communists in north China or Manchuria, are reportedly laying groundwork for PCC be convened Peiping latter part January. This conference to set up temporary coalition government, which will in turn call national assembly to draft and adopt constitution to serve as basis new government in final form. It is [Page 643] unlikely that this process will be completed by mid-summer at earliest. In interim period, prior to formation temporary coalition, such government as exists will probably consist of Communist military governments in some areas occupied by Communist armies, of Communist governments in areas which have been under Communist control for considerable periods of time, or of provincial and local governments acceptable to Communists in sense that they will not be considered potentially dangerous centers anti-Communist revolt.
Governments in latter category will presumably be those provincial administrations taking autonomous position when present Government leaves Nanking, and either continuing autonomous stand or adhering KmtRC or similar leadership. Strength of this bloc, which will be basic anti-Communist grouping should it enter temporary coalition and subsequent new government, will depend on extent of Communist military penetration south of Yangtze and on ability KmtRC or similar leadership to organize elements of group effectively. Any very significant Nationalist military resistance south of Yangtze which cannot be eliminated by provincial governments will probably result in further Communist military penetration and in consequent extending of Communist political control at expense non-Communist elements.
The above picture would be considerably changed were the Generalissimo to abandon or lose control of Kmt. In such eventuality, there would be some chance that Communist occupation might stop at north bank Yangtze and strong possibility that it would not extend further south than Shanghai–Nanking area. However, it presently appears likely that Generalissimo will attempt resistance longest possible. Under these conditions, considerable expansion Communist military control south China must be anticipated, with consequent reduction strength and bargaining power of non-Communist bloc.