(Yicai Global) July 2 -- A group of secret financial institutions the Communist Party of China set up in areas under the Kuomintang’s control had an important role to play during the KMT-CPC civil war period by providing financial and material support to the CPC.

The civil war started in 1927, when the Kuomintang’s right-wing, led by Chiang Kai Shek, betrayed the cooperation with the CPC. The Party established front organizations, represented by Kuang Ta, to buy military supplies and deliver them to the CPC-controlled areas of Shanghai, while carrying out daily economic activities. The civil war ran on until the foundation of the People’s Republic of China in 1949.

In 1933, five patriotic young men, including Yang Yanxiu, established Kuang Ta, which mainly focused on the businesses of western medicine and medical equipment, but gradually evolved into a joint-stock company. In 1940, it started transferring funds to Party organizations through remittance and cashing business, Yang’s son, Yang Kunhua, told Yicai Global.

Running Kuang Ta was no easy task, according to Yang Kunhua, as “providing funds in a reasonable way was particularly difficult.” In fact, the firm had to ensure cash supply to the CPC without harming the interests of shareholders. “Many problems needed to be solved such as how to withdraw money, how to deliver money safely, and how to cover the company accounts.”

Kuang Ta provided the CPC with millions of US dollars until it merged into Hong Kong-based China Resources after the PRC's foundation in 1949. Kuang Ta's founders, represented by Yang Yanxiu, donated their stakes and dividends to the Party. In 1979, Yang participated in the foundation of Shanghai Industrial and Commercial Patriotic Construction, the first private company set up in the wake of China’s economic reforms.

The company later became Shanghai AJ Group. The founders supported the construction of new China, which would have been impossible without the experience accumulated from Kuang Ta's operation, according to Shanghai AJ's Party Secretary Fan Yongjin.

Kuang Ta was not the only organization battling on the financial front during the civil war. Ting Yüan, founded in 1946, was another secret bank and contact station in charge of bills exchange and remittance. Relying on its capital consignments, a large number of military supplies in high demand were secretly transported to the CPC's liberated areas.

Editors: Dou Shicong, Futura Costaglione