The Secret War for China

Espionage, Revolution and the Rise of Mao

Panagiotis Dimitrakis

• Publisher: I.B. Tauris
• Year: 2017
• ISBN:
  9781786722713
• Edition: 1
• Topic: History
• Subtopic: Chinese History
• Index: History

In 1927, Chiang Kai-shek - the head of China's military academy and leader of the Kuomintang (KMT) - began the `northern expeditions' to bring China's northern territories back under the control of the state. It was during this period that the KMT purged communist activities, fractured the army and sparked the Chinese Civil War - which would rage for over twenty years. The communists, led by General Mao Tse-Tsung, were for much of the period forced underground and concentrated in the Chinese countryside. As the author argues, this resulted in China's war featuring unusually high levels of espionage and sabotage, and increased the military importance of information gathering. Based on newly declassified material, Panagiotis Dimitrakis charts the double-crossings, secret meetings and bloody assassinations which would come to define China's future. Uniquely, The Secret War for China gives equal weighting to the role of foreign actors: the role of British intelligence in unmasking Communist International (Comintern) agents in China, for example, and the allies' attempts to turn nationalist China against the Japanese. The Secret War for China also documents the clandestine confrontation between Mao and Chiang and the secret negotiations between Chiang and the Axis Powers, whose forces he employed against the CCP once the Second World War was over. In his turn, Mao employed nationalist forces who had defected - during the last three years of the civil war about 105 out of 869 KMT generals defected to the CCP. This book is an urgent and necessary guide to the intricacies of the Chinese Civil War, a war which decisively shaped the modern Asian world.

CHAPTER 1

SPIES UNLEASHED

Controlling the organised criminal gangs, such as the infamous Green Gang, was the key to controlling Shanghai, the ‘Paris of the East’, the legendary cosmopolitan city of China. But the price of the gangsters’ cooperation was high.

By early April 1927, Chiang Kai-shek had reached the outskirts of Shanghai with only 3,000 troops and was staying in a large villa in the French Concession. The main force of his self-proclaimed Revolutionary Army was in Nanking, about to confront the communists. The always-calculating Chiang sought a local alliance with the underground in order to raise his chances of success. Du Yuesheng, a staunch Confucian nicknamed the ‘Big-Eared Du’, led the Green Gang of Shanghai. Du had financially supported Chiang for many years, and after secret talks with the French chief of police – who offered Du's gang arms in return for not interfering with his activities – Du keenly offered his gunmen to Chiang. Many communist cadre did not believe that Chiang would turn against them.¹

Stalin had secret intelligence to the effect that the KMT would destroy the CCP. On 1 April he told his associates, ‘we are told that Chiang Kai-shek is making ready to turn against us again. I know he is playing a cunning game with us, but it is he that will be crushed. We shall squeeze him like a lemon and then be rid of him’. Stalin urged the CCP to hide their weapons, to prepare for going underground.² In Shanghai, Hsueh Yueh, a communist commander, urged for a raid against Chiang's villa, and his arrest, while he had a small force at his disposal. The Central Committee of the CCP hesitated, incredulous to Chiang's supposed animosity. Hsueh was ordered out of the city.³

On 6 April the Soviet embassy in Peking was raided by warlord Zhang Zuolin, the effective ruler of the old imperial capital. The same day, the Supervisory Committee of the KMT decided to wage war on the CCP. The ‘Shanghai Purge Committee’ of the KMT was established to direct the purge. The key motive for this decision of Chiang and his loyal lieutenants (who led China into the civil war) was the fear that the Green Gang, and other political factions, could set up an alliance with the CCP against the anti-communist KMT. In fact, many communists were gang members, for example Wang Shouhua, who led the Shanghai Federation of Trade Unions.⁴

Chiang's soldiers joined forces with the Green Gang members, who were under the control of Du. The gang members wore blue denim with white armbands that bore the character for labour. They raided the Chinese part of the city that was under communist control, as well as the International Settlement, ruthlessly hunting their opponents. The arrests and executions of CCP members commenced in the early hours of 12 April. The communists were surprised by the onslaught. Wang Shouhua, a communist labour leader, was murdered in cold blood. Chou Enlai was arrested and mistreated. The purges spread through Canton, Guilin, Ningbo, Amoy and elsewhere. Chen Lifu, at that time the personal secretary of Chiang Kai-shek and for decades one of his close associates, admitted later: ‘It was a bloodthirsty way to eliminate the enemy within. I must admit that many innocent people were killed.’ Six days later, Chiang Kai-shek proclaimed the formation of a KMT government in Nanking, headed by Hu Hanmin. Eventually, Chou Enlai was released on Chiang's orders.⁵ The KMT troops and militia defeated the communists in the urban centres.

Nonetheless, dozens of well-placed moles within the new KMT government and security services ensured a flow of vital information to the CCP and its Red Army, helping them to survive the Nationalist Army's campaigns against their base areas until the strategic retreat, the Long March of 1934–35. The purges of CCP members by KMT in 1927 paved the way for the CCP to reorganise the intelligence and security apparatus for espionage and the protection of their cadre.⁶

Chou Enlai was appointed head of the Central Military Department of the CCP. The Work Section of Special Affairs of the Central Military Department was called to provide for the protection of CCP leadership. It was claimed that the Central Military Department was involved in the arrest and execution of a British spy who made a bid against the lives of members of the Soviet Advising Delegation and provided for the protection Mikhail Markovich Borodin, the Soviet adviser to the KMT, until his return to Moscow.⁷ A few months later, in November 1927, the CCP set up the Special Services Division (zhongyang teke, the teke) – this was the main organisation for espionage and counterintelligence in KMT-held territories; meanwhile, the Commission for Suppressing Counterrevolutionaries operated in the CCP-held areas.⁸ Despite the KMT's offensive and success in the city, Chiang Kai-shek had realised that the communists were now holding rural territory, creating a popular base for continuous uprisings.

The Special Work Committee was chaired by Chou Enlai and included first communist spymasters Chen Yun, Pan Hannian, Guang Huian and Kang Sheng. In August 1931, Chou was assigned to Jiangxi Province and Kang was assigned the chairmanship of the Special Work Committee for two years, overseeing espionage in Shanghai and the rest of territories held by the nationalist regime. Kang Sheng would not remain a CCP functionary but turn into the secret services supremo who instigated terror, purges and the Cultural Revolution. Born to a landlord family in 1898 and given a classic Confucian education, Kang never respected the moral code that he was taught. As a teenager, he learned the martial arts and swordsmanship of the infamous liumang (hooligans). In 1924, he went to Shanghai and joined the CCP. Once he had graduated from the university of Shanghai, he worked undercover as a labour organiser: he had both a fighter's and an intellectual's credentials. In June 1927, he was appointed member of the new Jiangsu Provincial Committee. Within the party, Kang sided with Li Lisan, a leader supported by Moscow and the Comintern. With Li's backing Kang quickly became director of the Organisation Department of the Jiangsu Provincial Committee. It was clear that the Chinese communist cadre was split between those who were pro-Moscow/pro-Comintern, and those who remained suspicious of the applicability of Soviet advice in China. Among the latter was Mao Tse-tung.⁹

Kang Sheng had his own private network of spies which originated in Shandong. While on surveillance in Shanghai, he disguised himself as either a rickshaw puller or a ticket seller for the British Tramways Company. He never slept in the same safe house for a second night, always relying on his network for his safety.¹⁰

In March 1928, the Special Branch detective Patrick Givens of the Shanghai Municipal Police (SMP) arrested Luo Yinong. It was discovered that in the summer of 1927 Luo and Evgenin Kojenikov, a Russian national had developed a plan to kill Chiang Kai-shek, but this was not authorised by Borodin. The SMP counted that at least six people had been murdered by communists in the summer of 1927 in Shanghai International Concession.¹¹

Chiang Kai-shek was a man known for his short temper who believed strongly in military discipline. Nonetheless behind his military uniform was a character ready to negotiate and gain support from the powerful families of the land. His marriage to Soong Mayling (the sister of Ching-ling) guaranteed him constant, and abundant, financial support. This man of diplomacy in a general's uniform had become the protégé of Sun Yat-sen, and had witnessed both the intrigue and the spying of their opponents. In public Chiang proved himself an authoritarian and stubborn leader and teacher. In fact, Chiang based his rule on a continuous compromising with power factions (such as the Soongs and the clique of Chen Lifu and his brother), the underworld (the Green Gang) and warlords/generals. Chiang was not a suspicious spymaster. He believed in the teachings of both Confucianism and Christianity, creating his own understanding of the value of the benevolent leader and discreetly seeking praise, respect and flattery.¹²

Only when Chiang Kai-shek realised that the communists had gone underground did he think of establishing a modern secret service, beyond the military intelligence bureau of the general staff. On 4 January 1928, Chiang Kai-shek established the Liaison Group, an intelligence unit manned by ten officers – Whampoa graduates, his former ‘students’ – under his command headquarters. Chiang picked up Dai Li to be his liaison with the group – in effect, he was its leader.

Dai Li (born Dai Chunfeng) graduated from Wenxi County Elementary School. Encountering absolute poverty, he left his house when he was sixteen-years-old and joined various gangs. Eventually he found himself in Shanghai, where he worked for Du Yuesheng, the Green Gang leader. Through Du he met Chiang Kai-shek, but he did not cultivate a connection. He returned to his hometown and in 1927, after the suggestion of a friend, he applied to the Whampoa Military Academy. Du Yuesheng wrote him a letter of recommendation, and soon Dai entered the ranks of the cadets of the First Regiment of the Sixth Class of the Whampoa. In the Whampoa, Dai Li studied communism (before the purge of April 1927); in Dai Li, therefore, Chiang found an able and willing spy. The young hooligan and gambler turned himself into an obedient servant and decided not to graduate from the Academy, thus depriving himself of the chance of a military career. Chiang had an aide de camp who was well-versed in secret-intelligence gathering and torture methods. Years later, Captain Milton Miles of the US Navy, who had concluded an agreement of training and advice with Dai Li, described the spymaster: ‘he was a white-faced man, rather flat nose, lots of gold teeth in front of his mouth. I found out later he had his teeth knocked down his throat by the Communists in South China and he had them put back in, in gold. He had dark black hair and wide-set eyes … I found out that he was a ruthless man …’.¹³ At that time, Miles did not know how ruthless Dai Li was nor the extent to which his humble origins isolated him from the elite decisionmakers close to Chiang Kai-shek.

From 1928 to 1931, Chiang had only one official secret service– the Special Investigation Group of the Central Headquarters under Chen Lifu – for espionage and the purging of communists within the government and the KMT. Dai Li led the Liaison Group and went on to lead the Second Section of the Special Investigation Group, spying on the military. He developed personal networks – something that other influential leaders, like Chen Lifu, also did. Chiang Kai-shek was shrewd, and had foreseen this situation. He wanted to have multiple intelligence services competing for money, authority and personnel in order to preserve his rule as the final arbiter. For example, Xu Enzeng, who led the First section, spying and arresting communists, meanwhile fought to preserve the interests of the ‘CC clique’, the powerful politico-military group of Chen Lifu and his brother.¹⁴ On 1 April 1932, after the Japanese intervention in Manchuria, Chiang Kai-shek established the ‘intelligence organ for military affairs’, an espionage and communications organisation.¹⁵

Whenever an intelligence chief fell from grace and was condemned for corruption, the pieces and networks of his intelligence group were picked up by the rival intelligence actors (such as Dai Li) who silently and gradually acquired huge empires of petty spies in republican China, much to the annoyance of Chen Lifu and the Soongs, who had their own armies of spies. The powerful politico-paramilitary organisations the Society for Vigorous Practice and the Renaissance Society operated within the KMT, competing with – not to mention spying on – each other. The Blue Shirts organisation belonged to the Renaissance Society. Its members admired fascism and Nazism; they raided trade union offices and organised mass demonstrations to terrorise the workers. On 26 February 1932, Chiang assigned Dai Li more authority and money to establish a Special Services Department (SSD). This well-funded organisation would spy on political rivals, the military and the communists. The SSD belonged to the Renaissance Society.¹⁶

Generally, the SSD always came second to the powerful CC clique, which for ten years dominated the KMT Organisation Department, overseeing party and government appointments and gathering intelligence while its leaders accumulated immense wealth. The CC clique competed with the Blue Shirts and the SSD for more money and authority.¹⁷ In 1932, the Blue Shirts developed the Special Operations Brigades for counterinsurgency and espionage in rural areas claimed by the communists. The troopers were trained in espionage, raids tactics and propaganda, and were led by Chiang's former bodyguard Kang Ze.¹⁸

In their turn, the communist spymasters introduced strict security rules for party cadre on the hunt: no more than five people should attend cadre meetings, and their maximum time for deliberation would be three hours; the same meeting place (i.e. safe house) should not be used three times in a single week; a party organ meeting should have a maximum of seven attendees; and, should a member be arrested, all others should hide immediately. The Politburo conferred in safe houses in the International Settlement in Shanghai: on the ground floor women enjoyed modern music and played cards; meanwhile, on the upper floor, ‘waiters’ served the ‘customers’. Of course, these were really armed security who, in the event of a police raid, were ready to protect the Politburo central committee members who conferred.¹⁹

By early summer 1927 the communist spymasters commenced retaliation. The Shanghai Municipal Police (SMP) started investigating assassinations and attacks against nationalists and former-communists-turned-police-informers. The Red Squads undertook these attacks; they were called ‘Dog-Beating Corps’. The demand for hitmen had risen; thus members of the Shanghai underworld found another employer: the CCP. The gunmen dressed like beggars, peddlers and technicians. Some victims were left on the street for passers-by to witness their deaths; others were buried secretly. The gunfights took place at the French Concession, the greater Shanghai and the International Settlement.²⁰

In April 1928, the Intelligence Cell was established by the CCP, targeting the Shanghai Municipal Police and the KMT's Shanghai Garrison Command.²¹ The Cell was commanded by the resourceful risk-taker Chen Geng. Born in 1903 to a wealthy landlord family in Hunan, he joined the army of a warlord at the age of thirteen. After five years he abandoned the military life for a desk clerk vacancy at the Hunan Railway Bureau. Chen joined the Communist Party in 1922, where he met his fellow Hunanese Mao Tse–tung. Soon Chen attended the Whampoa Academy, distinguishing himself as one of the top cadets. Chiang was impressed with Chen and placed him in his own garrison. In October 1925, while the CCP and KMT had formed an alliance on a campaign against the warlord Chen Jiongming and others, Chiang's vanguard force was ambushed and after heavy casualties started retreating. The generalissimo himself stood his ground and out of despair tried to commit suicide. It was Chen who, surprising him, took his pistol by force and carried him away from the battlefield. Chiang held the brave Chen in a high regard. But Chen became a mole of the CCP within the KMT military in Shanghai.

In April 1928, the SMP raided a CCP safe house and arrested Luo Yinong, one of the communist leaders of the March 1927 uprising. Chen Geng sought to examine the breach of security which led to the raid. Gu Shunzhang, a communist spymaster who earlier had been a Green Gang member, learned that a beautiful Chinese German-speaking woman had approached a Special Branch officer at the Louza police station, telling him that she would provide him with a list of the names of 350 communist party members. In return, she wanted 50,000 Chinese dollars and a foreign passport. The woman offered him the location of a safe house to show him that she was in the know. Thus the SMP raided the house. Chen Geng identified the woman as He Zhihua, the former wife of Chu Teh (Zhu De), the top military commander of the Red Army and close associate of Mao until his death. Chu Teh and He Zhihua had both been in Germany in the mid-1920s. Chen and Gu geared up to claim the list. Escorted by Red Squad hitmen, they surprised her and her lover in their house. They soon found the list they were looking for and opened fire against the couple. The shots were masked by Red Squad members firing firecrackers on the street outside. The man was killed, while He Zihua survived. However, she was not protected by the SMP, and her whereabouts remained unknown after that episode which cost her the list and the life of her lover.²²

During the same period, Chen recruited a mole in the KMT Investigati...

Table of contents

• Front Cover
• Title Page
• Copyright
• Dedication
• Contents
• Abbreviations
• Acknowledgements
• Note on Pinyin
• Introduction Suspect Everyone
• 1. Spies Unleashed
• 2. Failed Campaigns
• 3. Shadowing the Comintern
• 4. Lawrence of Manchuria
• 5. The Unparalleled Intelligence Failure
• 6. Rogue Spymasters
• 7. Learning the Ropes of Espionage
• 8. The ‘C’
• 9. The Secret Strategy
• 10. A Mole in Mao’s office
• 11. Murderous Intrigues
• 12. The Antagonists
• 13. The Kremlin’s Spies
• 14. Our Man in Yenan
• 15. Into Manchuria
• 16. An American General
• 17. The Japanese Friends
• 18. The Russian Operatives
• 19. Spying on our Cousins
• 20. Uranium
• 21. The One-Eyed Lieutenant-General
• 22. Secret Sources
• 23. Guy Burgess the Spy
• 24. Spies’ Warnings
• 25. Stalin’s Fears
• 26. HMS Amethyst
• Aftermath ‘Your Future is Very Dark’
• Notes
• Bibliography