Chiang Kai-shek, through his marriage with Sun Yat-sen’s wife’s sister, had become allied with one of the greatest banking families.  In the days of the siege of Shanghai Chiang, together with his closest colleagues (with the exception of Hu Han-min and Wang Chying-wei, a leader who will be mentioned later), decided on the second alternative.  Shanghai came into his hands without a struggle, and the capital of the Shanghai financiers, and soon foreign capital as well, was placed at his disposal, so that he was able to pay his troops and finance his administration.  At the same time the Russian advisers were dismissed or executed.

The decision arrived at by Chiang Kai-shek and his friends did not remain unopposed, and he parted from the “left group” (1927) which formed a rival government in Hankow, while Chiang Kai-shek made Nanking the seat of his government (April 1927).  In that year Chiang not only concluded peace with the financiers and industrialists, but also a sort of “armistice” with the landowning gentry.  “Land reform” still stood on the party programme, but nothing was done, and in this way the confidence and cooperation of large sections of the gentry was secured.  The choice of Nanking as the new capital pleased both the industrialists and the agrarians:  the great bulk of China’s young industries lay in the Yangtze region, and that region was still the principal one for agricultural produce; the landowners of the region were also in a better position with the great market of the capital in their neighbourhood.

Meanwhile the Nanking government had succeeded in carrying its dealings with the northern generals to a point at which they were largely out-manoeuvred and became ready for some sort of collaboration (1928).  There were now four supreme commanders—­Chiang Kai-shek, Feng Yue-hsiang (the “Christian general"), Yen Hsi-shan, the governor of Shansi, and the Muslim Li Chung-yen.  Naturally this was not a permanent solution; not only did Chiang Kai-shek’s three rivals try to free themselves from his ever-growing influence and to gain full power themselves, but various groups under military leadership rose again and again, even in the home of the Republic, Canton itself.  These struggles, which were carried on more by means of diplomacy and bribery than at arms, lasted until 1936.  Chiang Kai-shek, as by far the most skilful player in this game, and at the same time the man who had the support of the foreign governments and of the financiers of Shanghai, gained the victory.  China became unified under his dictatorship.

As early as 1928, when there seemed a possibility of uniting China, with the exception of Manchuria, which was dominated by Japan, and when the European powers began more and more to support Chiang Kai-shek, Japan felt that her interests in North China were threatened, and landed troops in Shantung.  There was hard fighting on May 3rd, 1928.  General Chang Tso-lin, in Manchuria, who was allied to Japan, endeavoured to secure a cessation of hostilities, but he fell victim to a Japanese assassin; his place was taken by his son, Chang Hsueeh-liang, who pursued an anti-Japanese policy.  The Japanese recognized, however, that in view of the international situation the time had not yet come for intervention in North China.  In 1929 they withdrew their troops and concentrated instead on their plans for Manchuria.