Foreign News: Backs to the Wall

As chief of TIME'S Shanghai Bureau from 1945 to 1948, William Gray watched the disintegration of Nationalist China at first hand, came home doubtful that the Nationalists would ever be able to wage effective war against the Chinese Communists. Recently Gray, now a LIFE editor, visited Formosa, Nationalist China's last outpost. His cabled report:

Formosa represents the greatest irony in Asia today. Here, in its last refuge, Chiang Kai-shek's government has shed the chaos and despair of the mainland, and, at least temporarily, appears to be leading an almost serene and even well-managed existence. Nobody expects that this favorable state of affairs...