Record of a Conversation with Percy Chen

from Cde. G. M. Dimitrov

Secret

30 June 1944

RECORD OF A CONVERSATION WITH PERCY CHEN

26 June 1944

Percy Chen reported that while a guest in Chongqing, [US Vice President] Mr. [Henry] Wallace rapturously praised the USSR in meetings with leaders of the national government and Guomindang [Kuomintang], especially about the achievements of the Soviet people of the Far East and Central Asia. At the farewell lunch, Mr. Wallace again noted that the Chinese leaders ought to think about organizing good, friendly relations with the USSR. Mr. Wallace continued, this is a completely likely and necessary thing, since these two countries are territorial neighbors having a common land border of 5,000 kilometers.

Then Percy Chen declared that on Saturday, 24 June, Mr. Wallace left Chongqing for southwestern cities by plane. There he visited Guiyang, Guilin, and Kunming, familiarized himself with the situation in the southwest and then probably directly returned to Chengdu, and headed from there to the Northwest and the USSR.

When the discussion touched on Liang Hancao (the Minister of Information) Percy Chen said that at the end of 1942 this man made a trip to Xinjiang on assignment from the GMD [KMT] TsIK with the purpose of organizing a GMD provincial committee there, that is, in Urumqi. After this successful assignment he was visibly promoted and on 4 October 1943 he was nominated to the post of Minister of Information, at which he has worked to the present time. Many of the important official government bureaucrats have a hostile attitude toward him, but foreign correspondents in Chongqing call him a "Nazi", of course when he isn't listening, but he knows about this. Percy Chen said that Liang Hancao has actually already completely repainted himself or changed appearance, as they say here, openly switching to the side of the Central Club Clique and now works for them. Percy Chen considers Liang Hancao an anti-Soviet element despite the fact that he is Deputy Chairman of the KSKO [Chinese-Soviet Cultural Society].

Then Percy Chen reported that some days ago Doctor Kong Xiangxi flew to the US to take part in an international monetary and financial conference. He went there with a large staff of "advisers" and "experts". His wife or generally the entire family are flying to the US at the end of June or the beginning of July. The Chinese public is very bewildered why Dr. Kong is taking the entire family to the US from China. The impression is created in the population that he is sort of resettling there. In any event he expects to be there a long time. Then Percy Chen noted that Kong Xiangxi always leaves Chongqing when China's situation becomes difficult. It has thus also happened in this event.

China's situation, Percy Chen then said, remains extraordinarily serious and difficult. He said that if the matter continues so (the military defeats of the Chinese armies in Hunan and Hebei) then China cannot hold out any more than six or seven months, after which a catastrophe might come, a complete defeat, since there will no longer be anywhere to retreat. In addition, strange as it may seem, in spite of the fact that China is considered the first country in the world in population size, at the present time there are not enough soldiers in this country. Here this means soldiers who have undergone appropriate training. To this is still added the shortage of weapons and equipment.

After the successful end of operations in the province of Henan (at L[u]oyang) the Japanese transferred 150,000 soldiers and officers to the region of Changsha (Hunan Province), and seized the city of Changsha, the capital of Hunan, as a result of brief battles and large losses on both sides. After the elimination of the Chinese resistance the Japanese began to organize an offensive further to the south along the Canton [Guangzhou]-Hangkow [Hankou] Railway toward the city of Hengyang, a rail junction joining the Southwest and the Southeast provinces and Hangkow with Canton. After the seizure of Hengyang the Japanese are eliminating the resistance of Chinese units and will continue along the road to Canton. As a result of these operations the Japanese are assuring themselves of ground and rail communications in the near future to connect Japan with the countries of the southern seas through Chinese territory.

At the present time the railway is not operating in the sector of the Hengyang station to Guilin. Chinese military units are starting to dismantle and destroy the railway beds.

Percy Chen says that the Chinese still have a glimmer of hope that the Americans will land an assault group in the south of China. But this will hardly help since the Japanese are moving to the south comparatively rapidly and will get there ahead of the Americans. With the seizure of the entire railway from Changsha to Canton the Japanese will cut South China into two parts. The 3rd and 7th military regions, which will be cut off from the forces of the center and lose combat effectiveness, will remain in the southeast of China, in the deep rear of the Japanese.

(D. GODUNOV)