In 1945, as the USSR's forces swept down through Manchuria towards Japan, the Japanese ruling class feared being over run by it, and coming under its domination, as had happened with the Red Army's march into Eastern and Central Europe. The Japanese ruling class was, therefore, keen to quickly capitulate to US imperialism, before any such eventuality. Illustrating, the path of the next few years, of the US ditching its erstwhile soviet allies, US imperialism also ensured that, in China, the Japanese forces would only surrender to the KMT, and not to the CCP. However, by this time, and with the backing of the advancing USSR, the forces of the CCP began taking the surrender of Japanese forces, and overwhelming them where they refused to surrender.
The US assigned General Albert Wedemeyer to be Chief of Staff to Chiang Kai Shek, and as such, he responded to the advances of the CCP, by calling on the US to send seven US divisions to China to support the KMT. However, the request was denied by General George Marshall, as the US saw its role in Korea and Japan as more important. At the end of the war, the USSR stripped Chinese industrial areas of equipment, sending it back to the USSR, but also handed over vast arsenals of captured Japanese weapons to the CCP, following the surrender of the Japanese forces. By now, the CCP controlled around a quarter of Chinese territory and a third of its population. The KMT could no longer rely on using its position to supply itself from Chinese industry, whilst the CCP had the backing of the USSR.
The CPC, as a peasant party, implemented land reform, in favour of the peasants, which, also provided it with an almost limitless supply of additional manpower. By contrast, as with the experience of the Whites, during the Russian Civil War, areas controlled by the KMT, saw a return of the usual levels of corruption. The US admitted that rather than calling on the Japanese troops to surrender, in China, they used them to continue fighting the CCP, to buy time, whilst they airlifted KMT forces into those areas. As with the corruption seen in all such instances, as for example, with US proxies in Iraq, and now in Ukraine, the Chinese bourgeoisie, within the KMT, used every opportunity, as the Japanese withdrew, to line their own pockets. They occupied most of the banks, factories and commercial premises. They also began hoarding in preparation for a continued civil war against the CPC, rather than using resources for productive use, with the consequence that output collapsed, unemployment soared to nearly 40%, and a hyperinflation occurred.
As the KMT became increasingly on the back foot, the US was led to intervene more overtly in its support, as is again happening, now, in Ukraine. The US sent 50,000 troops to support the KMT in Hebei and Shandong, and now also actively sent Japanese and Korean troops to support the KMT forces against the CCP. In just two years after the end of the war, the US had sent $4.43 billion to the KMT, mostly in military aid. The large scale military aid for the KMT, much as now with that sent by western imperialism to Ukraine, meant that its forces could resist for longer, but that only delayed what was inevitable, as now in Ukraine. It simply resulted in greater loss of life, and destruction.
As CCP forces advanced, they also seized large amounts of these weapons, and, increasingly KMT troops not only surrendered, but changed sides. A victory for the CCP was imminent, and yet, Stalin, as he had done in Eastern and Central Europe, and consistent with his policy of seeking to appease western imperialism, so as to deter a further attack on Russia, called on Mao to form a coalition government with the KMT. Mao refused. On 23rd April, CCP forces took the KMT's capital in Nanjing, and KMT forces, staged repeated retreats to Canton, Chongqing, and Chengdu, before eventually settling in Taiwan, in December 1949.
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