In the summer of 1947, the fighting between GMD and CCP forces in Manchuria escalated. The PLA went from the defensive to the offensive, the GMD armies in the opposite direction. It was still not clear, however, that the GMD would lose the Civil War. The government was still strong, still clearly in control of most of China. Its armies still outnumbered the CCP's.

The GMD government still had major plans for the revival of China. The modernisation project, interrupted for eight years by the Resistance War, was revived. This included plans to modernise the economy, and to revamp the political system. The National Assembly, held at the end of 1947, was a huge exercise, in part a publicity effort to show a modernising China. It adopted a new constitution, on 25 December. There was some symbolism to the date. On the same day Chiang Kai-shek made a radio broadcast in Shanghai (perhaps on the model of the King's Christmas Day broadcast in Britain). His tone was plaintive:

He looked for some help to Christianity, to its ability to provide faith for the future, its trust in human character, and in its improvability. But another pronouncement, also made on 25 December, presented a quite different state of mind, totally certain, reliant on a very different belief system.