While Nationalists and Communist armies contended for the ancient empire, an undeclared war went on in the background. This was the cold war between the United States and Soviet Russia as they supplied arms and munitions to the opposing forces. Russia also supplied troops and laborers. For it has been estimated that no less than 250,000 North Korean Reds were induced to serve in various capacities with the Chinese Communists in Manchuria.[12] There the soldiers completed their military training in actual combat, with veteran Chinese officers as instructors. [12] GHQ, FECOM, MilIntelSec, GS, Allied Translator and Interpreter Sec (FECOM, ATIS), _Enemy Forces_ (Interrogation Reports [InterRpt], Sup No. 4), 16. By 1948 there was no longer much doubt about the outcome in China. In the battles of Tsinan, Changchun and Mukden, the Nationalists lost 33 divisions, totaling more than 320,000 men, in killed, wounded and missing. Losses of equipment included 250,000 rifles and vast quantities of other arms and equipment. During the four and a half months following the fall of Tsinan in September 1948, the Nationalist losses were estimated at a million men and 400,000 rifles. Even planes of United States manufacture were captured by the Reds, who also acquired a cruiser that the British had transferred to the Nationalists.[13] [13] U. S. Dept of State, _United States Relations With China_ (Washington, U. S. Government Printing Office [GPO], 1949), 357. “The unfortunate but inescapable fact,” concluded the United States State Department in 1949, “is that the ominous result of the civil war in China was beyond the control of the Government of the United States. Nothing that this country did or could have done within the reasonable limits of those capabilities could have changed that result; nothing that was left undone by this country could have contributed to it. It was the product of internal Chinese forces, forces which this country tried to influence but could not. A decision was arrived at within China, if only a decision by default.”[14] [14] _Ibid._, xvi. As a result, Mao Tse-tung’s forces could claim a sweeping victory by the end of 1949. Only the island of Formosa was left to Chiang Kai-shek and his battered remnants. Meanwhile, it grew increasingly plain that Korea was destined to be the scene of the next great tug-of-war between Communism and the free nations. _Civil Strife in Korea_ Not only had the Russians made the 38th Parallel a political boundary in Korea; they had also resisted all American attempts at unification. This meant that economic recovery was badly handicapped. For the mines, heavy industries and hydroelectric plants were located in the north, while the south had most of the agriculture. Products once exchanged with mutual benefit now had to be imported from abroad.