Sherman Xiaogang Lai, a former soldier of the Chinese People's Liberation Army (PLA), looks in this book at the role Shandong played between 1937 and 1945 in shaping the conflict between the Chinese Communist Party (CCP) and the Guomindang. His primary sources are annotated wartime documents published by provincial archivists in the 1980s and 1990s. He argues that the CCP established dominance in Shandong by integrating guerrilla warfare with revenue collection, grain requisition, and trade regulation and thus building a military-fiscal state, which it sustained by exploiting the wartime standoff between the Japanese (who lacked the capacity to administer the territory they occupied) and the Nationalists (who accorded Shandong a marginal role in its war). While the Communists initially adopted a low profile to conserve resources, the Guomindang raided the railway system to support the Allies in Southeast Asia and as a result became Japan's principal target. Later, the Communists engineered a Guomindang withdrawal from large parts of Shandong. They took control of the countryside and established an exclusion zone for their newly created local currency, the beipiao 北票, a Shandong initiative. In Yan'an, Mao Zedong encouraged these measures, which aligned with his emphasis on the role of banking in trade and production in the Communist bases.

One of the many strengths of Lai's study is the close attention it pays to the evolution of Mao's grand strategy in the war, in which Shandong featured as a springboard between central and northern China. Western scholars’ attachment to a base-area approach to studying the Chinese revolution has led to a relative neglect of Yan'an's role in nationally coordinating resources, seeding new areas with battle-hardened veterans, integrating indigenous and exogenous forces, creating pivots and key areas vital for their supraregional coordination, and joining up the Communist north and south. Lai's study is a useful corrective to this failure.

Lai provides a pioneering account of the Communists’ banking institutions in wartime Shandong, which they created from scratch, along with other important financial and economic experiments like the grain-supply and taxation agencies. He attributes the Communists’ success in the currency wars with the Japanese and the Nationalists to their control of Shandong's salt resources, which they used as a commodity support and financial reservoir.

Until the mid-1980s, Communist historians played down the importance of fiscal systems in the CCP's wartime strategy and attributed its achievements to its pursuit of social justice. Lai, however, does not accept that conditions in rural Shandong were conducive to a program of social and economic reform. Instead, he argues that the CCP carried out a military revolution, and here he finds parallels with the role of the fiscal-military state in nation-building in early modern Europe. Conceding that the social, economic, cultural, and institutional settings of the birth of China's twentieth-century party-state and Europe's eighteenth-century nation-states were hugely discrepant, he supplements his conceptual framework with theories of coercive power and moral agency.

It is a matter of debate whether Lai's general conclusions are supported by his own account of the rise of Communist power in Shandong. His thesis is that the Communists lacked legitimacy because there were insufficient grounds in the province for the agrarian revolution that was supposedly their justification, and they can therefore be said to have “hijacked” China's National Revolution by exploiting the Japanese invasion. But this would seem to ignore the fact that Mao explicitly suspended agrarian revolution in 1937 and switched his focus for the next eight years to resisting Japan and reforming people's livelihood. The evidence Lai himself presents suggests that the Communists achieved legitimacy in the region by restoring the economy, currency, trade, and social networks, tasks at which the Guomindang largely failed, and by replacing the notorious tianfu 田赋 system with an egalitarian grain tax that foreshadowed the radical changes implemented after 1945. By building new institutions, a disciplined army, and a coherent, highly adaptive administration and by mobilizing patriotic sentiment, they were eventually able to eclipse the Nationalists, who largely neglected Shandong, failed to develop an effective military response to the Japanese there, had little interest in establishing a unified command, spent much of their time squabbling violently among themselves, and relied on local strongmen, many of whom defected. As a result of their wartime successes, the Communists could sink deep roots in Shandong, which later provided more than a quarter of the PLA's soldiers. The description of the Communists in Shandong as “totalitarian” would also seem to contradict some of the book's key findings. The study shows, for example, that Communist social and economic policy in the province changed constantly in the war years, suggesting that local leaders were aware of the severe limits to their authority and sensitive to the constraints on them.

The writing is often inelegant and unidiomatic, and there are transcription errors. This is hardly the author's fault. Publishers of works in English by nonnative speakers have a duty to ensure that they are edited to an acceptable standard. Sadly, that did not happen here.