Nanjing decade

The Baojia an ancient Chinese institution was slated to become the basis of a new conscript system for the Chinese military, He Yingqin proposed as much in a 1928 report he argued for the implementation of the system due to its ability to produce large amounts of disciplined soldiers without a large cost as well as allowing for rapid expansion in wartime without a great cost too, it would also rekindle militarism in China and weaken banditry, the lack of education and poverty was dismissed by He due to the prevalence of baojia mobilisation in Guangxi, Yunnan and Guizhou. Universal conscription was rejected due to its infeasibility given China's limited finances and vast population instead troops were to be maintained into 6 categories akin to Japan with the active class serving for 2 years 2 classes of trained reserves with 5 and 10 years respectively and 2 classes of supplementary troops in territorial formations with all surplus men given ad-hoc training when possible, 50 divisions were to be raised in this method.The KMT were thereafter committed to this idea of conscription and the training of a vast body of troops to fight in a war.[7]

However, it was not until 1932 that Chiang ordered the implementation of the Baojia system with all officials ordered down to the county level to organise the training of Baojia with the greatest priority with punishment promised for failure for both local and regional leaders. Chiang ordered the program to be completed in 1934 with 3,000,000 peasants to be enrolled in 3 months in Henan alone. The Yu E Wan Field Headquarters (the task of Baojia generally falling to these HQs) took the lead under Yang Yongtai. Initially, the Baojia served as a militia with their main roles being akin to the emergency/civil services of other countries such as anti-bandit action, working on irrigation, flood control, road building, construction of military positions amongst other tasks and duties additionally, the Baojia worked as a system of registration for the millions of Chinese men and their families allowing for statistics to be recorded comprehensively. The overly rapid goals were already being met in over 80 counties in Anhui by spring 1933 with similar progress in Hubei and Henan.[8]

By 1936 the Baojia system was finally linked to the army system with 50,000 conscripts called up via the Baojia into the regular army in 12 divisions and by early 1937 this rose to 20 divisions being filled with Baojia recruit and 40 more were to be raised as per the 60 division plan.[9]

The Militia of modern China an invention of Zeng Guofan and his proteges were to become co-opted by the Nationalist Government in order to use them for anti-communist policies and to intensify central government power in local areas. In 1928, the provincial level position of Superintendent of Rural pacification (Qingxiang duban) was founded with Rural Pacification Commanders (Qingxiang Siling) controlling them later renamed to Peace preservation commanders (bao'an siling). The Governor of a province held this post ex officio but with most military and executive actions emanating under this office it quickly became an office equivalent in power to the Governorship. The office was primarily tasked with the suppression of communist revolutionaries and partisans and thus it controlled all the provincial militias.[10][11]

This office was built on the backs of earlier efforts during the Northern Expedition to organise anti-communist militias to control the growth of CCP power in rural areas. These early forms of militas were organised at village, township and town levels with no coordination and with strong local ties which hindered militia efficiency the formation of a provincial office was intended to remedy this and to also prevent the local gentry and "bullies" from using the militia for their own personal gain.[10]

The reforms instituted by Hunan were applied in a similar fashion across the Lower Yangtze region as well as Hubei and Jiangxi.[12] The instituion and proliferation of the militia (peace preservation and Baojia) saw banditry almost eliminated in the provinces where they were established with the remaining bandits fleeing to the mountains or the coastal islands, the Hunan peace forces being used as regular troops temporarily is a testament to the strength of these forces.[12]

In Hunan in 1928 a set of regulations was issued by He Jian the governor (and therefore Superintendent) to re-organise the provincial militias and bring them under control of the Central Government. Each county was ordered to organise militia under the term household conscription militia (aihutuan) as well as a general bureau headed by the magistrate to control the County militia's funding, armament, recruitment and deployment of the militia theoretically centralising the militia with a deputy being nominated by the magistrate by recommendations sent from county organisations. The militiamen were divided into 2 categories the first consisted of one out of every 3rd man between the ages of 18 and 40 into the unpaid role of watch patrol (shouwangdui) armed with various melee weapons and shotguns led and organised by the Baojia. The 2nd category was the best men of the watch patrol which were organised into 90 man standing companies (changbeidui) where they served for 3 years with a salary and were given standardised armament each county had to form 5–20 such companies depending on resources and necessity.[10]

However, this first organisation did not go well as the magistrate had many other functions and therefore could not properly attend to the militia meaning the deputy often a local elite member still controlled the militia undermining the purpose of the regulations which was to centralise militia. Secondly, the watch patrols also intended to be used for disemminating KMT doctrine and propganada failed as the localities failed to properly introduce the necessary training and they often lacked the resources regardless thus it was introduced in a desultory manner if it at all. This then undermines the standing companies who were to be recruited from watch patrols and instead regular troops and mercenaries were labelled as watch patrols undermining the efforts to link to a broad popular base there was also a lack of experienced and trained personnel to command these forces lastly, the division of forces into small groups hindered their ability to fight communist groups of a large size or even bandits and they would be reluctant to leave their immediate community not to mention aiding other counties.[10]

In 1930 a new regulation was issues expanding the aihutuan to all able-bodied law-abiding men aged 18–40 with the explicit purpose to militarise the entire province He Jian rejected arming the entire Aihutuan with guns if at all instead focusing on their ability to organise anti-communism giving it a more political purpose than originally intended. He Jian also ordered inspections to assure proper implementation of these regulations province wide the success of these formations was reported in the media as the aihutuan joined the army in anti-communist campaigns. Following a 4 Province conference on militia He Jian authorised further formations ordering each county to consolidate its Changbeidui companies into a singular Peace Preservation battalion or regiment depending on the pre-existing strength. The usage of military terminology was because He Jian intended for these Peace Preservation formations to become auxiliaries for the military and he introduced regulations which brought pay, pensions and recruitment into line with military standards, military officers were to command at higher levels with lower officers given military training and occasionally being rotated into the army itself for short periods in order to gain experience. A further major change was the consolidation of command under the Superintendent (He Jian) bypassing the counties and He then appointed his men into the militia command positions seizing command from the local elites this was furthered by dividing the province into special districts headed by district commanders appointed by He this combined with the usage of militia across multiple districts different areas of the province and by basing them in different regions combined to eliminate county ties completely. In 1933 He had established 29 Peace preservation Regiments for the entirety of Hunan with numerical rather than geographical designations.[10]

Following the Jinan incident public pressure particularly from the student body itself led to the introduction of military training at all Chinese schools with instructors dispatched from the Central government to oversee the implementation of military training with it first implemented in the Lower Yangtze region then spreading to other areas under Nationalist control then the whole country. By 1935 491 Secondary schools and 33,654 secondary students were participating with more schools and students participating in the Lower Yangtze region. All male students under the regulations would have to attend 3 hours of training a week and 1 3 week intensive session in the summer for the first 2 years of high school. Female students received first-aid and other medical training. The instruction was 2 hours a week practical and 1 theoretical. Training was akin to a less intensive military academy course with topics such as combat, fortifications, signalling and communications, marksmanship, drill, armament manufacture and international military trends. In 1935 collective military training was organised in Jiangsu, Zhejiang, Shanghai and Nanjing with 3 month courses providing NCO training with it being mandatory for all first year male students with some "spiritual training" in loyalty to the state and the KMT being introduced.[13]

The Chinese Post Office expanded dramatically during the period with over 12,000 offices in existence, the post office also acted as a currency exchange and handler of money particularly with remittances across the urban-rural divide the Office also worked across political boundaries giving it the status of one of the few truly national bodies. The office even offered services beyond these offering insurance policies, saving accounts and gift certificates. These bank-like activities allowed for migration to occur as urban workers had a trusted institution from which they could support their families in rural areas contributing greatly to the modernisation of the economy in the interior as well as the coastal regions.[26]

The new Ministry of education amalgamated and reorganised the education system creating 13 national universities, 5 technical colleges, 9 provincial universities to provide higher education nationwide and help create an educated populace. Additionally, private higher educational institutionals received state subsidies of the 53 private colleges and universities 40 received subsidies in 1936. Secondary education saw even more marked development with the number of schools increasing in number by over 400% with 2,042 middle schools, 1,211 normal schools and 370 professional schools the total enrollment of these schools was 545,207.[27]

The Nationalist Government in Nanjing following the northern expedition had achieved nominal unification of China and sought to consolidate their control over China's revenue. Tariff autonomy was regained by 1930, this led to higher import duties which brought a rapid increase in revenue to the central government. The collection of tariffs was also changed from silver to gold; this was due to the falling price of silver following the Great Depression. The Salt tax which previously was seized by local and provincial officials was brought back into Nationalist control whilst transfers to the provinces still did occur, the Nationalist government retained a larger share of the revenue. The Likin, a tax heavily targeting internal trade that was often abused by its collection, was mostly abolished. However, the Nationalist government mainly drew its revenue from the modern sectors of the economy and the collection of taxes from agriculture was not controlled by Nanjing given that agriculture comprised a large section of the economy this severely limited the ability of the Nationalist government to raise revenue effectively leading to large amounts of borrowing and the issuing of bonds to pay for its expenditures. The land tax remained in the hands of the provinces who did not reform or improve its collection. The surrender of the land tax to the provinces in 1928 surrendered some 65% of the GDP to the authority of the provinces to collect taxes from this was made for political reasons mainly to achieve national unity by allowing the provinces to maintain a source of income who.

Government debt grew by a considerable amount during this period due to the rising military expenditures as Chiang sought to modernise the Chinese military as the Chinese government floated over 1.6 Billion Yuan worth of bonds on the Chinese market leading to a total bond debt of 2 billion Yuan by 1936. The Shanghai and wider Chinese bond market worked well with the Nationalist government providing significant cash flow to the government.

The Nationalist Government invested heavily in road construction for military purposes.[28]^: 10 It built 82,000 kilometers of roads during the Nanjing decade for a total of 115,000 kilometres.[29][28]^: 10 The old city walls and shantytowns of many cities were demolished to facilitate roadbuilding.[28]^: 10 Additionally, during the period the Nationalist government imported 500,000,000 Yuan worth of industrial machinery though this figure is not impressive in comparison to the USSR's industrial development for the more impoverished, factional, agrarian and politically divided China of the period it is a considerable amount, the majority of this industrial machinery was dedicated to textiles, foodstuffs, cement and chemicals all important to a growing nascent industry.[29] The telegraph system abandoned and neglected by the warlords not only recovered but also expanded to over 95,000 kilometres additionally, telephone line length increased 12 fold from 4,000 to 52,500 kilometres, the recovery of basic infrastructure facilitating modern communication was an important part of the development of infrastructure.[29]

The figures provided by Liu and Yeh are deemed to be more reliable.[30]

*A catty being equivalent to roughly 600 grams

*the cost of collecting taxes is deducted for all years excluding 1928–29

** mostly consisting of stamp tax, provincial remittances, government business profits and miscellaneous sources

Chen Jitang, the governor of Guangdong prioritised as typical of warlords his own provincial development above all else, though he did collaborate with Nanjing when politically expedient, he nonetheless remained devoted to his province. To these ends, Guangdong began a major highway construction programme under his rule, increasing from 3,661 km in 1929 to 17,587 by 1935, the highest in China by province. Another was the usage of his military to suppress banditry which was assisted by the large road network facilitating the movement of troops throughout the province.[35]

Chen, having secured his position in the province saw military development as his priority expanding his army from 50,000 in June 1931 to over 150,000 by July 1932:

To equip his much larger army, Chen renovated the Shijing Arsenal from 1933 to 1935 to the extent that it employed 2,000 workers and had an annual cost of 2,400,000 Yuan. The arsenal producing monthly 12,000 rifles, 2,100,000 cartridges, 6-18 mortars, 6-18 machine guns, 1,200 shells and 20,000 grenades. However, even this was deemed insufficient in terms of artillery production and gas masks and 11,000,000 additional yuan was spent on building further arsenals to remedy this, though these projects were not completed by the time the Liangguang incident broke out and Chen was removed from power. Chen additionally purchased 12 tanks, 15 armoured cars in 1932 and from 1933 to 1936, 29 fighters, 10 reconnaissance planes, 6 monoplanes, 6 bombers, 3 trainers and a transport plane to bolster his airforce. This purchase of material was accompanied by a 300,000 yuan aircraft plant in Shaoguan.[36]

Chen Jitang the Governor of Guandong until his removal in 1936

As the table indicates, the province of Guangdong ran consistent budget deficits and its overspending meant that the money allocated to the national treasury and therefore for Nanjing were never forwarded to the central government, though military expenses of a province were allocated to the national treasury and not the provincial treasury, unless there was a deficit where the provincial treasury would account for the shortfall.[37]

*excise on cloth,rolled tobacco, cotton yarn, matches and cement

The Guangdong national treasury never turned a profit under Chen Jitang, this angered Chiang Kai-Shek who in 1931 (prior to Chen's large military expansion) complained that Chen had claimed the entire national treasury to defray his own military spending and accordingly his military expenditure. According to the central government, regulations should not exceed 1,500,000 a month, yet Chen claimed 4,300,000 yuan a month, triple the amount of men he retained in 1931. He additionally earned 800,000 yuan a month from the Guangxi territories he occupied and did not report this to the central government at all.[37]