New Fourth Army incident The New Fourth Army Incident ( 新四軍事件 ) , also known as the Wannan Incident ( 皖南事变 ) , occurred in China in January 1941 during the Second Sino - Japanese War , during which the Chinese Civil War was in theory suspended , uniting the s and Nationalist s against the Japan ese . It is significant as the end of real cooperation between the Nationalists and Communists . Today , ROC and PRC historians view the New Fourth Army Incident differently . From the ROC point of view , it was punishment of Communist insubordination ; from the PRC view , it was Nationalist treachery . Causes . ROC viewpoint . In the fall of 1940 , the Communist New Fourth Army attacked Nationalist forces under Han Deqin . However , Benton ' s book " New Fourth Army " argues the Communist attack was a counterattack , a response to an initial attack by Han Deqin , and that this initial attack was the result of Chen Yi ' s goading and harassment of Nationalist forces . Regardless , the conflict led to heavy losses for the Communists . PRC viewpoint . For PRC historians the incident began in December 1940 , when Chiang Kai - shek ordered Eighth Route Army and the New Fourth Army to withdraw from Anhui and Jiangsu in a month . The Communist Party agreed to move the New Fourth Army troops in Southern Anhui ( Wannan ) to the northern shore of the Yangtze River . On 4 January , the 9000 - strong force started to move from Yunling Township in Jing County towards Jiangsu , planning to cross the river along three routes . Ambush . On January 5 , the Communist forces were surrounded in Maolin Township by a Nationalist force of 80 , 000 led by Shangguan Yunxiang and attacked days later . After days of fighting , heavy losses — including many civilian workers who staffed the army ' s political headquarters — were inflicted on the New Fourth Army due to the overwhelming numbers of Nationalist troops . On January 13 , Ye Ting , wanting to save his men , went to Shangguan Yunxiang ' s headquarters to negotiate terms . Upon arrival , Ye was detained . The New Fourth Army ' s political commissar Xiang Ying was killed , and only 2 , 000 people , led by Huang Huoxing and Fu Qiutao , were able to break out . Aftermath . Chiang Kai - shek ordered the New Fourth Army disbanded on January 17 , and sent Ye Ting to a military tribunal . However , on January 20 , the Chinese Communist Party in Yan ' an ordered the reorganization of the army . Chen Yi was the new army commander . Liu Shaoqi was the political commissar . The new headquarters was in Jiangsu , which was now the general headquarters for the New Fourth Army and the Eighth Route Army . Together , they comprised seven divisions and one independent brigade , totalling over 90 , 000 troops . Because of this incident , according to the Communist Party of China , the Nationalist Party of China was criticized for creating internal strife when the Chinese were supposed to be united against the Japanese ; the Communist Party of China , on the other hand , was seen as heroes at the vanguard of the fight against the Japanese and Nationalist treachery . Although as a result of this incident , the Communist Party lost possession of the lands south of Changjiang , it drew the party support from the population , which strengthened their foundations north of Changjiang . According to the Nationalist Party , this incident was retribution to numerous occasions of treachery and harassment by the New Fourth Army . The novelist Mao Dun ' s story " Fushi " is about this incident .