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Ria Stone

China Under Japanese Domination – IV

Japan and the Capitalists in Eastern China

(May 1944)

From New International, Vol. X No. 5 (Whole No. 86), May 1944, pp. 154–156.
Transcribed & marked up by Damon Maxwell.
Proofread by Einde O’ Callaghan (May 2013).

(Continued from last issue)

Japanese control extends over all the areas of China which had been industrialized to any degree before the war.

All Chinese factories which were not destroyed were either seized outright or reorganized under joint Sino-Japanese management. “Cooperating” Chinese, in North China at least, usually continued to get half of the profits from their own enterprises. [1] To Northern China, where little industry had been developed before the invasion, Tokyo sent heavy and light machinery to extract profits from Chinese labor. [2] Mineral deposits were developed and communications built to transport needed raw materials to Japan. Japanese manufacture became the source of supply for Chinese workers and peasants.

The Chinese bourgeoisie met this economic aggression either by “cooperation,” flight or reorganization of their firms under Western control (until Pearl Harbor). Many of the Western capitalists welcomed the Japanese as protectors of foreign “rights” in China.

Politically, the Japanese tried to gain the favor of the Chinese bourgeoisie and the Western capitalists by their program for the eradication of communism. At Peking they set up a regime, now known as the Political Council of North China, under Wang Keh-min, erstwhile president of the Bank of China. At Nanking they set up Wan Ching-wei as president of the “National Government of China” and as “true” leader of the Kuomintang.

To the Chinese the Japanese posed as the liberators of Asia from Western imperialism. [3] To meet this political offensive, Britain and America, on October 10, 1942, announced the relinquishment of extraterritoriality. In a counter-offensive, on January 10, 1943, Japan signed a treaty with the Wang Ching-wei government, relinquishing extra-territoriality and promising to restore to the Nanking regime all rights in Japanese concessions as well as in those which her army seized from Britain. The native bourgeoisie had desired this for years but had been unable to wrest it from Western imperialism. The puppet regime at Peking expressed “sincere thanks to the Japanese authorities for their kindness and this impartial step, which selfish Britain and America had never even dreamed of.”

Japan and the Proletariat in Eastern China

Very few reports have come through from the Japanese-occupied cities of China and the data on the proletariat is therefore extremely limited. The most complete study has been made of Shanghai [4], and this key city has thus been chosen as the chief subject of the present section.

Shanghai has been for more than half a century the crucible in which conflicting imperialist and class forces could be seen in struggle. At Shanghai was concentrated the majority of foreign and native mills and factories, banks and motor vehicles. It was at Shanghai before the war that the Japanese had their largest industrial investments. It was at Shanghai that the workers carried out an insurrection in February 1927 and it was at Shanghai that Chiang Kai-shek found sufficient bourgeois and imperialist support to dare his open betrayal of the Chinese revolution.

At Shanghai, from 1927 to 1937, the workers were most hostile to the Chiang Kai-shek government, which in cooperation with the Japanese and Western employers had clamped down on the right of Chinese workers to organize and strike, destroyed their unions and killed or imprisoned their leaders.

Before the outbreak of hostilities, industry in the International Settlement was employing 200,000 to 250,000 workers. The outbreak of the war brought a sharp decline to an industrial payroll of only 27,000 in December, 1937. At the same time, hundreds of thousands of refugees flocked in from war-torn China, seeking employment in foreign industry and safety beneath Anglo-American guns. The cessation of industry, combined with the tremendous influx of refugees, reduced the Shanghai workers to living in camps, scooping refuse from garbage pails for food, and finally in large numbers finding their last resting place in the huge piles of exposed corpses that littered the streets.

By December, 1938, however, Shanghai industry had staged a remarkable recovery. The number of employed workers had again jumped to 237,000. This phenomenal gain was possible and necessary principally because of the huge mass of cheap labor that was available and which, unemployed, constituted a threatening political force to both Japanese and Western capitalists.

The Japanese invaders needed rice for their populations at home and took it. Wealthy Chinese saw the enormous profits in rice speculation and hoarded. Living costs for the workers soared. By 1940 the real wages of the Shanghai workers had fallen to 55.43 from the 1936 index of 100.

The administrators of the International Settlement refused to control prices on the ground that it “was better for Shanghai to have rice at a high price than no rice at all.” This was all very well for those gentry and capitalists who could pay the high price. The masses in the streets rioted seventy times in December, 1939, and in June, 1940, staged another epidemic of rice riots.

In the eight months of 1937, preceding the declaration of war, 80,820 workers had been involved in 213 strikes. When war came, the worker was thrown out of his job and his main thought was simple survival. Gradually as the war moved away from Shanghai and industry recovered, the proletariat began to revive its pre-war militancy.

In 1938 there were thirty-four strikes and in 1939, ninety-six. By October 1940, the number had jumped to 247 for the first ten months alone. These strikes involved 110,642 workers. The strike movement of 1940 indicated that the proletariat, although competing hard even for the chance at employment, was no longer demoralized.

From the beginning of the war to May 1939, the Shanghai labor unions had maintained continuous relations with the Chinese national government. During this period, strikes were discouraged by the Kuomintang because they might embarrass the Anglo-American employers, whose aid Chiang wanted against Japan. From May to November 1939 labor activity was stimulated by the Japanese against Western employers. The Japanese formed a Chinese Republic Workers League as a means toward this end but dropped it like a hot potato when they found it impossible to control. Next the Japanese organized the Chinese Workers Welfare Organization. This organization was disbanded when the Western employers refused to bargain with it. In the fall of 1940 there was a large-scale transport strike, partly political but basically grounded in the miserable working conditions of the strikers. All ruling elements recognized this strike as a danger to the peace and order of Shanghai and combined to break it. In December 1940 there occurred a police strike.

Thus, when last heard of, the Shanghai proletariat was proving itself unmanageable by the Japanese and a danger to the combined dueling forces of Shanghai.

The destruction of so much Chinese property and industry in the early months of the war diffused the Chinese bourgeoisie. After Pearl Harbor the Western capitalists were forced to flee. The Shanghai proletariat found its old native and Western enemies displaced as social powers. Chiang Kai-shek, that deadly foe of the Shanghai proletariat, was there-tore forced to appeal to it to undermine the Japanese occupation. As early as 1939, Chiang was speaking to the workers in the following vein:

“As your spirit is the most revolutionary, so your faith in the ideology of resistance must be firmer and firmer as time goes on ... You must realize that your strength is as great as that of our soldiers at the front ... Strengthen your organizations ... Those of you who work in factories, if only you would refuse to work, then our enemy would not be able to make any profits.”

Against the Japanese and the Chinese Quislings, no serious force exists in Shanghai except the Shanghai proletariat – a proletariat which has no reason to love the Chinese ruling class and which has seen itself sacrificed time and again to rival national and international armies. In Asia, as in Europe, it is the proletariat which has been left to bear the bur-dens of living under the invaders and on whom therefore the bourgeoisie must rely for the national resistance.

We still know very little about the activity of the Shanghai proletariat today. Compared to the magnitude of its task, it is very small. But it has exhibited its revolutionary temper and capacity before, and it will not stand alone.

The Allies of the Shanghai Proletariat

Not only will the Shanghai workers find allies among the peasants throughout China. In backward Southwestern China, industrialization by the Chiang Kai-shek government is creating a proletariat, still small in numbers but being organized by the government itself in large-scale production and into unions. In the North the Japanese imperialists are bringing an industrial development hitherto unknown in this region.

In Southern China, for forty years the breeding place of revolutionary sentiments, significant changes have also taken place. From Hong Kong and Canton, thousands of workers have fled to their homes in the interior, bringing with them their training in the class struggles of capitalist production and their revolutionary experiences.

After the First World War, returned workers from the West played an important role in the organization of Chinese trade unions. Before the Second World War, overseas Chinese were, for the most part, petty bourgeois merchants and proprietors or employees in small shops, owned by their relatives. Today Chinese workers in the United States, for example, are for the first time employed in any numbers in the basic industries or conscripted into the modern American army.

The overseas Chinese workers have experienced the harsh discrimination of Western society and have no illusions about Anglo-American friendship for the Chinese. Generally known is the refusal of Chiang Kai-shek, under British pressure, to permit Chinese soldiers under Tsai Ting-kai to participate in the defense of Hong Kong. The British preferred to let Hong Kong fall into Japanese hands rather than risk its defense by a large Chinese army.

The virtual peonage in which Chinese merchant seamen have been held in British ships and the refusal of the American government to permit them on shore have already resulted in riots and violence.

Finally the foundations are being laid in Eastern China for international class solidarity between the Chinese and the Japanese masses. The Japanese policy of developing North China industrially has brought the largest influx of Japanese settlers, peasants and workers. The Chinese have discovered a new kind of foreigner, an invader who has coolies as well as gentlemen. As many as 25,000 Japanese army “engineers” have labored alongside 63,000 Chinese coolies to build bridges. Japan’s imperialist policy has created a situation in which class solidarity can be forged on the basis of common misery in the process of capitalist production.

Already Chinese soldiers and seamen in Japanese-officered troops and ships have mutinied and brought their arms and ships over to the Chinese. [5] Every action of this kind brings closer the inevitable demoralization in the ranks of the Japanese invasion forces.


After the First World War, the revolutionary upsurge passed to Asia only after it had spent itself in the West. The war had been fought primarily on European soil. Japan had taken advantage of the European war to begin her assertion of independent imperialist action in China. China during the war and for years thereafter was at the nadir of her political power. Nevertheless, China had developed industrially during the war. And the revolution which had precipitated the end of the war had been a semi-Asiatic revolution. It was therefore inevitable that the workers and peasants of China should assert themselves, as they so heroically did, in the 1925–27 revolution. [6]

The Second World War in reality began in China and is an Asiatic as well as a European war. The war, in Asia as well as in Europe proper, brought to a head the incompetence of the bourgeoisie to carry through the defense of the nation. As a result, soon after the beginning of the war, and in China even before, the process of differentiation between the masses of the people and the old ruling classes was taking place on a geographical basis.

At the end of the war, revolutions will occur all over Europe. These events cannot fail to produce effects at a very early date both on the bourgeoisie and the proletariat and peasantry of Asia. The collapse of Mussolini, brought about by the Italian workers, shook the whole Axis camp. The effects of the collapse of Germany will be immeasurably more drastic on the sole remaining Axis partner. Whether the proletariat and peasants of Japan or China or India will be first to move into action, it is impossible to say. But from the pre-ceding analysis, we may safely anticipate that the Chinese masses will play a dramatic and decisive role in the world revolutionary upsurge after the Second World War.


1. America’s Hole in Asia, by Harry Paxton Howard, New York, 1943, page 255.

2. Japan Fights for Asia, by John Goette, New York, 1943, page 154.

3. Before Pearl Harbor the Germans offered Britain a plan to save the International Settlement from Japanese hands. The price was German representation on the Municipal Council of the Settlement. Fear of popular indignation at home kept the British from accepting the offer. Goette, op. cit., page 224.

4. Economic Shanghai: Hostage to Politics, by Robert W. Barnett, Institute of Pacific Relations.

5. New York Times, June 30, 1943, and September 15, 1943.

6. In Japan itself, from 1918 to 1923, hardly a year passed without virtual civil war between Japanese workers and peasants and Japanese government forces. (Howard, op. cit., pages 85–86)

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