Nationalist takeover of Japanese-occupied territory Takeover of Japanese and collaborator goods and properties is flawed and corrupt Widespread corruption among returning Nationalist officials: undermines their legitimacy Nationalists highly unpopular reliance on and lenience to former collaborators Nationalist governments hostile attitudes and policies toward Chinese in formerly occupied areas, particularly the Northeast Economic Collapse Massive inflation, completely out of control Deficit spending: government spending far more than it receives, so prints more money Gold Yuan Reform: Failure to check the inflation, hostile policies toward businessmen erodes support for the government Civil War Politics and Student Unrest Failure of the Democratic League, a political Third Force Student Protests: December 1946: Anti-American protests following the rape of a Chinese student by U.S. Marines Spring 1947: Resist Hunger, Resist civil war movement, a nationwide protest against the civil war Chinese Communists and New Democracy New Democracy: Maos concept from the early 1940s Forged in the United Front spirit of broad appeals Promises that communism still far off in the future Promises a role for urbanites, intellectuals, capitalists in building the new order ftp://sunsite.unc.edu/pub/multimedia/chinese-music/Historical_Voices/