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SUMMARY The center of gravity in the Far East lies in China, which is at once the largest state and the base area of East Asia. The great majority of the people in the Far East are Chinese, inhabiting over three million square miles of Chinese soil. Chinese culture- ideas, social institutions, language-has for centuries been the dominant culture of the Far East. Economically, China is an important factor in the life of its neighbors, while politically and militarily China is potentially the greatest power in East Asia. China is now passing through a critical period of social, economic, and political instability brought on largely by the impact of Western civilization which began in the early nineteenth century and has now been felt in almost every phase of Chinese life. For more than 100 years the Far East has been an area of international friction, princi- pally because of China's internal weakness, which has invited foreign encroachment on Chinese sovereignty. Since the end of World War II, China has failed to derive much profit from the defeat of Japan because it has been torn internally by the civil war between the National Government and the Chinese Communists, while menaced on the north by a revival of Russian imperialism. Present trends in China are in the direction of increasing instability and extension of Chinese Communist military and political influence. Without foreign assistance, the National Government has little prospect of reversing or even materially checking these trends because of its declining military strength, the maladministration and corruption prevalent throughout the Government's civil and military structure, its inability to cope with economic deterioration, and its lack of popular support. Scarcely any positive factors are operating to promote the stability of the National Government other than (a) prospects of economic and military assistance from the US, and (b) promise of substantial internal reforms. There is, however, considerable doubt that the present Government can or will accomplish the latter. Without such reforms, moreover, it is extremely questionable whether any reasonable amount of US assistance could achieve any long-term political and economic stabilization. Within Nationalist territory the Nanking Government lacks popular support, and the prestige of Chiang Kai-shek has greatly diminished. Unless in the near future he demonstrates again a capacity for revolutionary leadership, it is unlikely that he can recover the support of the great bulk of politically conscious Chinese. On the other hand, there is no alternative leader or group of leaders in sight. Furthermore, oppo- sition to the National Government, outside the ranks of the Chinese Communist Party, is largely unorganized, lacking in armed strength, and therefore relatively ineffective. If unchecked, present trends will lead to disintegration of the National Govern- ment's authority, decisive military successes for the Chinese Communists, the spread of warlordism, and the acceleration of tendencies toward separatism and rebellion which are now manifest along the northern frontier, in South China and in Formosa. Such general disintegration would facilitate the extension of Chinese Communist influence into areas where it is now excluded or represented only. by underground groups, and in i SECRET

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    "ocrText": "SUMMARY\nThe center of gravity in the Far East lies in China, which is at once the largest state\nand the base area of East Asia. The great majority of the people in the Far East are\nChinese, inhabiting over three million square miles of Chinese soil. Chinese culture-\nideas, social institutions, language-has for centuries been the dominant culture of the\nFar East. Economically, China is an important factor in the life of its neighbors,\nwhile politically and militarily China is potentially the greatest power in East Asia.\nChina is now passing through a critical period of social, economic, and political\ninstability brought on largely by the impact of Western civilization which began in the\nearly nineteenth century and has now been felt in almost every phase of Chinese life.\nFor more than 100 years the Far East has been an area of international friction, princi-\npally because of China's internal weakness, which has invited foreign encroachment on\nChinese sovereignty. Since the end of World War II, China has failed to derive much\nprofit from the defeat of Japan because it has been torn internally by the civil war\nbetween the National Government and the Chinese Communists, while menaced on the\nnorth by a revival of Russian imperialism.\nPresent trends in China are in the direction of increasing instability and extension\nof Chinese Communist military and political influence. Without foreign assistance,\nthe National Government has little prospect of reversing or even materially checking\nthese trends because of its declining military strength, the maladministration and\ncorruption prevalent throughout the Government's civil and military structure, its\ninability to cope with economic deterioration, and its lack of popular support. Scarcely\nany positive factors are operating to promote the stability of the National Government\nother than (a) prospects of economic and military assistance from the US, and (b)\npromise of substantial internal reforms. There is, however, considerable doubt that\nthe present Government can or will accomplish the latter. Without such reforms,\nmoreover, it is extremely questionable whether any reasonable amount of US assistance\ncould achieve any long-term political and economic stabilization.\nWithin Nationalist territory the Nanking Government lacks popular support, and\nthe prestige of Chiang Kai-shek has greatly diminished. Unless in the near future he\ndemonstrates again a capacity for revolutionary leadership, it is unlikely that he can\nrecover the support of the great bulk of politically conscious Chinese. On the other\nhand, there is no alternative leader or group of leaders in sight. Furthermore, oppo-\nsition to the National Government, outside the ranks of the Chinese Communist Party,\nis largely unorganized, lacking in armed strength, and therefore relatively ineffective.\nIf unchecked, present trends will lead to disintegration of the National Govern-\nment's authority, decisive military successes for the Chinese Communists, the spread\nof warlordism, and the acceleration of tendencies toward separatism and rebellion which\nare now manifest along the northern frontier, in South China and in Formosa. Such\ngeneral disintegration would facilitate the extension of Chinese Communist influence\ninto areas where it is now excluded or represented only. by underground groups, and in\ni\nSECRET"
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