Watershed of Fate

The men who guide the Kuomintang listened to the words of their leader. The harsh voice of the Generalissimo was unusually clipped, metallic. Chiang Kai-shek told the 150 solemn faces before him that the days of one-party administration in China were nearly over. It was time, he said, to take the third of Sun Yat-sen's three steps: from the era of political tutelage (under the Kuomintang) to the era of constitutional democracy. Then all political parties should have equal rights and the Kuomintang should no longer enjoy special privileges before the law.

The members of the Kuomintang's most exalted body, the Central Executive Committee, agreed. They resolved that the long-deferred People's Congress should meet within a year from the end of war, adopt a constitution, set the date when it is to go into effect.

The sober men knew the importance of the step. That morning they had read in Sao Tang Pao (the Army newspaper) a selection from Chiang's new book China's Destiny: "In the past China's destiny depended on foreign policy. Now it depends on our ability to secure inner political unification and concentration of national power. China stands at the watershed of her fate, a fate which will be decided during the present war and within two years."

They decided that they wanted the Generalissimo to steer them through and named him President of the Republic to succeed the late Lin Sen.

Chiang asked the Committee to concentrate on postwar reconstruction, economic as well as political. It meant, the official press explained, that the war is a step on the road of the People's Revolution, that the Revolution is a new environment in which national reconstruction can flourish.

The Committee abolished one obstacle to economic reconstruction: the law requiring foreign enterprises to be 51% Chinese-owned and to employ a Chinese general manager. Now the welcome sign was officially out for foreign capital under Chinese law (TIME, Aug. 16).

Next came a 16-point resolution, setting a frame for a new economic design and defining the types of industry which after the war shall remain in private hands. State and private ownership shall go hand in hand, the Kuomintang decided, with monopoly-type industries and utilities falling to the State, while "industry which may be entrusted to individuals or which will be less suitable for the State to operate shall be privately operated."

There was no mistaking the point: the Generalissimo, who has proved durable in the face of all doubts, thought the end of the war in the East was in sight. He wanted China set for a mighty upsurge of prosperity and democracy.

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