caused by the war effort, stirred mass unrest throughout China, fostering sympathy for the communist cause. Inflation had begun with the start of the Sino-Japanese War and had worsened to chronic hyperinflation by the middle of the 1940s. The inflation problem was significantly based in the KMT's failure to restore revenue sources and its printing of money to finance its deficit. The communists gained significant legitimacy by defeating hyperinflation in the late 1940s and early 1950s. Their development of state trading agencies reintegrated markets and trading networks, ultimately stabilizing prices. In addition, the communists' promise to redistribute land gained them support among the massive long suffering rural population. In 1949, communist forces began making rapid advancements against the collapsing Nationalist army. By October the communists had captured Beijing, with Nanjing falling soon after. The People's Republic of China was proclaimed on 1 October 1949. The KMT seemed powerless to even slow communist expansion and Chiang ordered an evacuation of the Republic of China to Taiwan, one of the only industrialized parts of China not to experience large scale destruction during the war. The relocation was intended to be only temporary as Chiang planned to regroup and reorganize his forces before returning to reconquer the mainland. As the KMT fled, it stripped China of liquid assets including gold, silver, and the country's dollar reserves. KMT forces also attempted to firebomb industrial sites, but workers were able to stop them at many such locations. By the time the KMT was defeated, commerce had been destroyed, the national currency rendered valueless, and the economy was based on barter. Despite years of planning, no offensive to retake the Chinese mainland would ever materialize, with the ROC existing in permanent exile on the island. Taiwan continued to prosper under the Republic of China government and came to be known as one of the Four Asian Tigers due to its "economic miracle", and later became one of the largest sources of investment in mainland China after the PRC economy began its rapid growth following Deng's reforms. See also Economic history of China (1949–present) Economic history of China before 1912 Economy of China Economy of Hong Kong Economy of Macau Economy of Taiwan Economy of the Han dynasty Economy of the Ming dynasty Economy of the Song dynasty References Bibliography and further reading Chow, Gregory C. China's Economic Transformation (2nd ed. 2007) excerpt and text search Eastman