This chapter examines the impact of the sudden end of the war, which caught the Chiang Kai-shek government off guard. The Allies had planned an amphibious landing on the coast of China, which would have given Chongqing time to regain control of the east coast and reduce inflation. After Japanese surrender, inflation briefly halted but then rather quickly resumed. Why was there no peace dividend?

Botched liberation: The retaking of occupied areas was done poorly, alienating many of the residents who had endured years under Japanese control. Topics covered include fleecing collaborators and undervaluing the currency of the Wang Jingwei government. There were problems maintaining the exchange rate of fabi with foreign currencies. Shipping and transportation problems were serious and inhibited economic recovery. UNRRA had problems getting aid to China.