Early hopes that the economy could be revived quickly were soon dashed. T. V. Soong’s projects strained the budget as well. Japanese reparations were of little help. The foreign exchange issue remained a difficult problem

State enterprises had the upper hand over private firms. Foreign firms found it difficult to do business in China as well. Textiles did well at first but encountered supply and energy problems. Much of the cotton textile industry was controlled by the government, especially mills that had been run by the Japanese during the war and then taken over by the government. Electric-power generation has difficulty recovering. Many plants had suffered damage during the war and could not replace damaged equipment.

At the end of 1946: Had China reached a tipping point?