In 1931 the Japanese invaded northeastern China and set up a puppet government. Instead of resisting Japan, Nationalist troops (under Chiang Kai-Shek) launch a series of military campaigns against the Communists.

Chiang's extermination of the communists began in October 1933, and a year later the Communist were driven into a small area in Kiangsi (now Jiangxi) Province. Close to defeat, the Communists decided to march north to Yenan in Shansi (Shanxi) Province, a distance of 8000 km over some of the most inhospitable terrain. On the way the Communists confiscated the property of officials, landlords and tax collectors, and redistributed the land to peasants.

They armed thousands of peasants with weapons captured from the Nationalists and left soldiers behind to organise guerrilla groups to harass the enemy. The march proved that the Chinese peasants could fight if they were given leadership and weapons. Of the 90,000 people who started the Long March, only 1 in 4 made it to Shansi. During the march a meeting of the CCP hierarchy recognised Mao's overall leadership, and he assumed supreme responsibility for strategy.

Japan launches a full-scale invasion of China in July 1937, and within five months the Japanese enter Nanking and massacre 200,000 people. The government retreats to Chungking, a remote area ruled by rival warlords. America enters the war in 1941 and finds Chiang (Nationalist) keeping his best troops to fight the Communists.