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Immediately after setting up the Soviet, the CCP began their "land revolution", confiscating property en-masse from the landlords and gentry of the region.[3]: 265 Its vigour in doing so resulted from two factors, its ideological commitment to peasant revolution and economic necessity. The base area's economic situation was precarious.[4]: 129 , such that in 1936 the entire Soviet's revenue stood at just 1,904,649 yuan, of which some 652,858 yuan came from confiscation of property.[3]: 266 The program of land redistribution, the party's hostility towards merchants and its ban on opium depressed the local economy severely, and by 1936 the Communists were reduced to raiding nearby Shanxi (then ruled by Nationalist-backed warlord Yan Xishan) in order to acquire grain and other supplies.[3]: 266 The tightening of the Nationalist blockade in the same year made it difficult to secure resources from outside the region.[4]: 129 At no point during the period 1934-1941 was the Yan'an Soviet financially solvent, being dependent first on the confiscation of property from "enemy classes" and then on Nationalist aid,[3]: 265 the latter of which comprised around 70% of the Soviet's revenue from 1937 to 1940. [3]: 269
The blockade decreased during the Second United Front, but the Nationalists intensified it after military hostilities began again in 1941.[4]: 129 Japanese assaults in the region and poor harvests worsened the effects of blockade and the region had a severe economic crisis in 1941 and 1942.[4]: 130 By 1944, the region had suffered cumulative inflation of 564,700% since 1937, compared with 75,550% in Nationalist areas.[6] CCP leaders raised the issue of abandoning the area, which Mao Zedong refused to do.[4]: 130 Mao implemented a mass line strategy,[4]: 130 and imposed heavy taxes on the population in order to pay military expenses, which resulted in what is known as the "Yan'an Way", establishing the Border Region's independence from Nationalist subsidy.[6] However, the economy of the Border Region was also substantially supported by the production and export of opium into Japanese and Nationalist areas,[6] with academic Chen Yung-fa arguing that the economy of the Border Region was so dependent on opium that, had the CCP not engaged in opium trading, the so-called "Yan'an Way" would have been impossible.
Media
In January 1937, American journalist Agnes Smedley visited Yan'an.[7]: 165–166 In April, Helen Foster Snow traveled to Yan'an for research, interviewing Mao and other leaders.[7]: 166
The Eighth Route Army established its first film production group in the Yan'an Soviet during September 1938.[8]: 69
Yuan Muzhi arrived in Yan'an in fall 1938.[4]: 128 With Wu Yinxian, Yuan made a feature-length documentary, Yan'an and the Eighth Route Army, which depicted the Eighth Route Army's combat against the Japanese.[4]: 128 They also filmed Norman Bethune performing surgeries close to the front lines.[4]: 128
In 1943, the CCP released their first campaign film, Nanniwan, which sought to develop relationships between the CCP army and local people in the Yan'an area by showcasing the army's production campaign to alleviate material shortages.[4]: 16
In 1944, the CCP welcomed a large group of foreign (primarily American) journalists to Yan'an.[7]: 17 In an effort to contrast the party with the Nationalists, the CCP generally did not censor these foreign reports.[7]: 17 In December 1945, the party's Central Committee instructed the party to facilitate the work of American journalists out of the hope that it would have a progressive influence on American policies toward China.[7]: 17–18
Diplomacy
After the US entry into World War II, the CCP sought military support from the US.[7]: 15 Mao welcomed the American Military Observation Group in Yan'an and in 1944 invited the US to establish a consulate there.[7]: 15