Following the Battle of Shanghai of 1937, the cabinet of Japanese Prime MinisterFumimaro Konoe pushed for a quick and diplomatic settlement to the war in China, and not an expensive and long-term occupation. Furthermore, the Japanese Imperial General Headquarters was not keen to permit a repeat of the political experimentation undertaken by the Kwangtung Army in the establishment of Manchukuo, and pressured the Japanese Central China Area Army to establish a collaborationist local government to handle the details of local administration for the Shanghai metropolitan area. In November 1937, a number of well-known residents were approached to take over provisional civilian administration of the city. Eventually, the Japanese were able to secure the assistance of Fu Xiao'an, the wealthy director of the Chinese Bank of Commerce and head of the Shanghai General Chamber of Commerce. Fu was a personal and political enemy of Nationalist general Chiang Kai-shek and had been imprisoned by the Kuomintang in 1927 for refusing to lend Chiang money. After his release from prison, he fled to Japanese-held Manchuria, and lived several years under Japanese protection, nursing his hatred for Chiang. However, Fu was unwilling to head the new government himself, and recommended Su Xiwen, a professor of religious philosophy and political science at the Chizhi University in Jiangwan. Su was a graduate of Waseda University in Tokyo and was known for his conservative political views. Su was also known for his views on Buddhist-Daoist syncretism, which influenced the name of the new administration—the "Great Way" referring to Eastern philosophy's concept of the Tao—and its flag: the yin-yang symbol of Daoism on a yellow background.
History
The new government quickly made efforts to restore the city's public services and established a police force under the command of Zhang Songlin, former commander of the Jiangsuprovincial police, to maintain public order. Funding was provided by a tax levied on all imports and exports through the Japanese front lines into and out of Shanghai, and Su was assisted by a number of experts provided by the South Manchurian Railroad Company. Su promised to purge the city of both communist and Kuomintang elements. However, neither Su nor his Great Way Government were regarded seriously by Japanese political agents, who looked with dismay and contempt at the assortment of criminals, religious cultists, and narcotics dealers who gravitated to leading positions in the new administration. The promised public works failed to materialize as Su's cronies siphoned off funds, and the propaganda value of the new administration quickly deteriorated. In December 1937, the Japanese brought in a tough northern Chinese collaborator named Wang Zihui to oversee operations as a temporary measure. After Liang Hongzhi established the Reformed Government of the Republic of China in Nanjing in March 1938, the Japanese Central China Area Army organized a number of public rallies and ceremonies in support. In less than a month, the Reformed Government asserted its authority over the Great Way Government by establishing a Supervisory Yamen to take over the functions of the Shanghai municipal administration. Su Xiwen formally recognized the Reform Government and adopting its flag on May 3, 1938. Under the Reformed Government, Su Xiwen continued as head of the Supervisory Yamen until he was replaced by Fu Xiao'an as mayor on October 16, 1938.
