In January 1941 Guomindang forces crushed a New Fourth Army (NFA) column under Xiang Ying and Ye Ting, which had just missed a deadline to get north of the Yangzi River. The Guomindang and the Communist center in Yan'an both wanted Xiang in the north, each for its own reasons. However, Xiang put off leaving until the last moment for he was loath to give up his independent base in south Anhui. Xiang favored closer cooperation with the Guomindang than did Communists elsewhere in China. Ironically, Xiang's resistance to Yan'an's pressure to cross the river brought him into conflict with Chiang Kai-shek. Loyalist NFA units that did go north routed Guomindang armies there, and partly in retaliation, Chiang Kai-shek suppressed Xiang as a “mutineer.” Yan'an leaders called the Incident an act of fratricide, and afterward they radicalized their idea of the united front—always wider than one of mere collaboration with the Guomindang—still further. In Yan'an, Xiang was blamed for hesitating to expand northward and for entering a trap when he eventually did leave. However, Yan'an bore some responsibility, never acknowledged, for choosing Xiang's route to disaster.

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