CHINA: Chiang Reorganizes

In Chungking this week Generalissimo Chiang Kai-shek took the step that all friends of China had hoped for—he moved to strengthen his Government.

In as new War Minister came austere, youthful (44) General Chen Cheng, one of China’s ablest and most honest soldiers (TiME, June 16, 1941). It was General Chen who last year turned back an incipient Japanese drive on Chungking. It was he who helped organize the successful Chinese expeditionary force now fighting in North Burma. A protégé of Generalfssimo Chiang (who officiated at his wedding), General Chen is a veteran of Kuomintang campaigns against warlords and Communists. But of all Kuomintang generals, he is generally regarded as persona gratissima with the Communists. A realist who is perfectly sure of his own democratic political faith, he gets along easily with Chou Enlai, Yenan’s shrewd emissary who last week was back in Chungking.

In as new Finance Minister went suave, competent 0. K. Yui, 48, banker, ex-mayor of Shanghai and formerly Chungking’s Vice Minister of Finance. Minister O. K. Yui’s real name is Yü Hung-chün. He adopted the O.K. as a tribute to American ways.

Through the Hard Years. General Chen relieved General Ho Ying-chin, 55, who had held his post since 1930. Minister O. K. Yui relieved H. H. Kung, 63, the Generalissimo’s brother-in-law, who is now in the U.S. These were the men who had helped steer China through the country’s most difficult years of war. Now it was up to their successors to steer through the difficult years ahead. But H. H. Kung remained as vice president of the Executive Yuan. General Ho remained as Army chief of staff.

Six other high posts were reshuffled: dapper, German-trained Chu Chia-hua became Minister of Education, replacing Kuomintang bigwig Chen Li-fu, who took over the Ministry of Kuomintang Organization. Liberal, professorial Dr. Wang Shih-chieh became Minister of Information, replacing Liang Han-chao, who received the portfolio of Overseas Affairs. Chang Li-sheng, Secretary General of the Executive Yuan, became Minister of the Interior, replacing Chou Chung-yao, who took the vice-presidency of the Examination Yuan.

Only visionaries or political infants supposed that Generalissimo Chiang’s reorganization of his Government would instantly change the course of the war, now going heavily against the Chinese, or would immediately remove all the causes of the criticism which has been leveled at Chungking and Chiang. But Chiang had shown new resolution at a moment when even some of his friends had begun to wonder.

China, as always in eight years of resistance, was trying to help herself. But governmental reorganization could not alone beat the Japanese. What China still needed above all else was help—guns and tanks and planes—from her allies.

Reform of Production. Almost simultaneously with his governmental shakeup, Generalissimo Chiang launched a sweeping reform of China’s war production. A new War Production Board, headed by slight, scholarly Dr. Wong Wen-hao, was charged with coordinating all agencies dealing with production. From the U.S. came an economic mission, headed by ex-WPBoss Donald Nelson. Its job: to help Dr. Wong.

The U.S. experts would probably concentrate on getting maximum production from China’s steel furnaces. Alloy steel and other critical materials not available in China would still be flown in over the Hump. The Americans would also try to increase liquid fuel production against the day when U.S. trucks would roll again up the Burma Road.

But the brunt of reform lay on the shoulders of Dr. Wong. His knottiest problem: 1) to find transport to get raw materials to factories and finished goods to the front; 2) to prevent financial inflation from cramping his production style.