Although political parties in modern democracies were meant to champion differences/diversity and individual rights, the Nationalists and their counterpart, the Chinese Communist Party, could not coexist. Before the Nationalists reunified China, they split with the Communists in April 1927, ending a four year brief alliance with the Communists in their common fight against the warlords. Nationalist troops massacred Communist sympathizers and trade union members in Shanghai on April 12, 1927, which was called "white terror" in later Communist textbooks. Thousands of Communists/sympathizers were killed around the country in months. Communist forces moved underground, into mountainous regions in southeast China and started guerrilla warfare.

The Nationalists became the government in 1928, after which they concentrated their force on exterminating the Chinese Communists, forcing the latter to launch a "Long March" away from their base in southeast China to northwestern China via the southwest, crossing marshes, snow-covered mountains, and the Tibetan plateau, from Oct.1934-Oct.1935, arriving finally in Yanan.

Chiang Kai-shek's determination to kill off the Communists took precedence over his fightings against Japan. After taking Manchuria in 1931, Japanese troops continued to be deployed in central China in the provinces adjacent to Beijing, in the name of protecting Japanese subjects and property. Japan even tried to persuade the Chinese government to accept the autonomy of five central Chinese provinces to facilitate their takeover of China. Chiang Kai-shek, on the other hand, concentrated his elite Manchurian troops near Yenan in an attempt to exterminate the Communists once and for all. When Chang Hsueh-liang, the Manchurian general in charge of the extermination campaign, could not put up with it any more, and kidnapped his boss Chiang Kai-shek when the latter came to inspect the progress of the military campaigns against the reds, forcing Chiang to sit down and talk with the Communists, forming a second united front against Japan.

Faced with external foreign invasion (Japan) and famine/flooding in China, Chiang Kaishek's solution was the New Life Movement (for a more detailed discussion of it, see Arif Dirlik's The Ideological Foundations of the New Life Movement), which was a movement to restore traditional Confucian values, and discourage individualism. There was, however, much content borrowed from the YMCA movement in the West (in terms of etiquette and personal hygiene, among others). The chief audience of the New Life Movement was students from the primary to the tertiary levels. The serious intent of the movement was trivialized by such regulations as girls' hair length, and length of their skirts. In the face of millions of Chinese starving to death, and Japan spreading its influence/force in China, the two chief policies the Nationalist government championed was the extermination of the Reds and the New Life Movement, quite out of touch with reality. But when Chinese college students marched to the streets to protest against government policies, they were showed with clubs and bullets. No criticism of the Nationalist government was allowed. Censorship, imprisonment and torture, and execution: these were methods the Nationalists used to make sure their policies would go unopposed.