<P> In 1937, Japan invaded China and the resulting warfare laid waste to China . Most of the prosperous east China coast was occupied by the Japanese, who carried out various atrocities such as the Rape of Nanjing in 1937 . In one anti-guerilla sweep in 1942, the Japanese killed up to 200,000 civilians in a month . The war was estimated to have killed between 20 and 25 million Chinese, and destroyed all that Chiang had built up in the preceding decade . Development of industries was severely hampered after the war by devastating conflict as well as the inflow of cheap American goods . By 1946, Chinese industries operated at 20% capacity and had 25% of the output of pre-war China . </P> <P> One effect of the war was a massive increase in government control of industries . In 1936, government - owned industries were only 15% of GDP . However, the ROC government took control of many industries in order to fight the war . In 1938, the ROC established a commission for industries and mines to control and supervise firms, as well as instilling price controls . By 1942, 70% of the capital of Chinese industry were owned by the government . </P> <P> Following the war with Japan, Chiang acquired Taiwan from Japan and renewed his struggle with the communists . However, the corruption of the KMT, as well as hyperinflation as a result of trying to fight the civil war, resulted in mass unrest throughout the Republic and sympathy for the communists . In addition, the communists' promise to redistribute land gained them support among the massive rural population . In 1949, the communists captured Beijing and later Nanjing as well . The People's Republic of China was proclaimed on 1 October 1949 . The Republic of China relocated to Taiwan where Japan had laid an educational groundwork . </P> <P> The Republic of China Army takes its roots in the National Revolutionary Army, which was established by Sun Yat - sen in 1925 in Guangdong with the goal of reunifying China under the Kuomintang . Originally organized with Soviet aid as a means for the KMT to unify China against warlordism, the National Revolutionary Army fought major engagements in the Northern Expedition against the Chinese Beiyang Army warlords, in the Second Sino - Japanese War against the Imperial Japanese Army, and in the Chinese Civil War against the People's Liberation Army . </P>

Who came to power to lead china in the interwar years