In January 1951 the military situation for the US in Korea looked so grim that on January 13, 1951 the US voted for a UN cease-fire resolution that would have been very favorable to the Communists:
"On January 13, 1951, after the Chinese army gained victory in the third campaign by occupying Seoul, the Political and Security Committee of the UN General Assembly passed the report on the basic principles for resolving the Korean problem. The report suggested: immediate implementation of a ceasefire; holding a political conference to restore peace; withdrawal of foreign military forces in stages and organization of elections for the Korean people and making preparations for a unified Korea. Following a ceasefire, a meeting with the participation of the UK,US, USSR, and Communist China would be arranged to resolve problems in the Far East, among which would be the problems of the status of Taiwan and the representation of China in the UN. But on the basis of his assessment of the situation, Mao Zedong believed that it was possible to obtain complete victory, and therefore rejected the ceasefire proposal." Yu Xilai and Wu Zichen, "On China's Foreign Policy Strategy" in Douglas Kerr (ed.), *Critical Zone 3, A Forum of Chinese and Western Knowledge* (Hong Kong University Press 2009), p. 217. http://books.google.com/books?id=I0kvN9LDHP0C&pg=PA217 (Unfortunately, books.google.com no longer has a preview available for this book.)
"Reflecting the rank defeatism in MacArthur's headquarters, the United States voted in favor of the UN cease-fire resolution, even though it would have drawn the truce line south of Seoul and represented a stunning US defeat. Mao, however, wanted total victory. He immediately rejected the cease-fire and ordered his troops to continue their advance to the Korean Strait and the Yellow Sea..." Jay Taylor, *The Generalissimo: Chiang Kai-shek and the Struggle for Modern China,* pp. 448-9.
Note that the resolution was very favorable to the PRC not only in the location of the truce line but in the fact that the PRC would be included (along with the US, UK, and USSR) in the meeting to resolve the status of Taiwan and the representation of China in the UN--but the Republic of China would not. Chiang Kai-shek's reaction was predictable: he "called the proposed resolution that excluded the Republic of China from the projected meeting the 'most despicable and nasty' decision by an international organization in the twentieth century, and an act portending 'the doom of the world.'" Taylor, p. 448.
Mao never again got a chance for such favorable terms. On January 17, 1951--the very day Zhou Enlai officially announced the PRC's rejection of the UN plan--the extreme defeatism in the US camp began to dissipate:
"The aura of military disaster still hovered in their minds when Collins and Vandenberg departed Japan for the peninsula. But once in Korea, they found a much improved situation. After visiting numerous front line units, they reported to Washington on January 17, 1951, that the Eighth Army was far from being a defeated command, that under the leadership of Lieutenant General Matthew B. Ridgway, General Walker's successor (Walker died in a jeep accident on December 23), the army was being revitalized. They said they had found high morale and self-confidence.
"This good news was unexpected. It now appeared to the United States government that a military disaster was not in the making. The JCS study presented to MacArthur, which had outlined possible extreme American reactions, was abandoned. As confidence slowly returned, the United States moved to brand Communist China an aggressor and to initiate U.N. collective action against her...." Carl Berger, *The Korea Knot: A Military-Political History* (Philadelphia: University of Pennsylvania Press 1957), p. 133. http://www.archive.org/stream/koreaknotamilita027506mbp/koreaknotamilita027506mbp_djvu.txt Within a couple of months, Seoul was to be recaptured by US/UN forces, and was never again to be in Communist hands.
Which of course leads to the big question: What if Mao had accepted the UN cease-fire resolution in January? What would be the consequences of a South Korea even poorer and more agricultural than it was in OTL in the 1950's and of a larger and more powerful North Korea? And what would happen to Taiwan? (There would be sure to be a loss of morale there, and his partial victory in Korea might embolden Mao, and would in any event allow him to re-deploy some troops from Korea to the Taiwan Straits. OTOH, the very fact of defeat in Korea might make the US more determined than ever to hold on to Taiwan.) Finally, what are the domestic consequences in the US--if a stalemate in Korea hurt Truman politically, what would a defeat (if not quite a total one) do? (There will no doubt be GOP calls for Truman's impeachment, yet by 1952 Truman might actually be a little more popular than he was in OTL--which admittedly is not saying much--because even a bad peace might be less unpopular than a seemingly endless stalemate.)
Admittedly, it is difficult to see Mao voluntarily agreeing to stop when the situation looked so favorable for him. The only POD I can think of would be pressure by Stalin on Mao, and that in turn would be only likely if Truman had privately made some sort of drastic threat to Stalin and the latter was convinced it was not a bluff.
"On January 13, 1951, after the Chinese army gained victory in the third campaign by occupying Seoul, the Political and Security Committee of the UN General Assembly passed the report on the basic principles for resolving the Korean problem. The report suggested: immediate implementation of a ceasefire; holding a political conference to restore peace; withdrawal of foreign military forces in stages and organization of elections for the Korean people and making preparations for a unified Korea. Following a ceasefire, a meeting with the participation of the UK,US, USSR, and Communist China would be arranged to resolve problems in the Far East, among which would be the problems of the status of Taiwan and the representation of China in the UN. But on the basis of his assessment of the situation, Mao Zedong believed that it was possible to obtain complete victory, and therefore rejected the ceasefire proposal." Yu Xilai and Wu Zichen, "On China's Foreign Policy Strategy" in Douglas Kerr (ed.), *Critical Zone 3, A Forum of Chinese and Western Knowledge* (Hong Kong University Press 2009), p. 217. http://books.google.com/books?id=I0kvN9LDHP0C&pg=PA217 (Unfortunately, books.google.com no longer has a preview available for this book.)
"Reflecting the rank defeatism in MacArthur's headquarters, the United States voted in favor of the UN cease-fire resolution, even though it would have drawn the truce line south of Seoul and represented a stunning US defeat. Mao, however, wanted total victory. He immediately rejected the cease-fire and ordered his troops to continue their advance to the Korean Strait and the Yellow Sea..." Jay Taylor, *The Generalissimo: Chiang Kai-shek and the Struggle for Modern China,* pp. 448-9.
Note that the resolution was very favorable to the PRC not only in the location of the truce line but in the fact that the PRC would be included (along with the US, UK, and USSR) in the meeting to resolve the status of Taiwan and the representation of China in the UN--but the Republic of China would not. Chiang Kai-shek's reaction was predictable: he "called the proposed resolution that excluded the Republic of China from the projected meeting the 'most despicable and nasty' decision by an international organization in the twentieth century, and an act portending 'the doom of the world.'" Taylor, p. 448.
Mao never again got a chance for such favorable terms. On January 17, 1951--the very day Zhou Enlai officially announced the PRC's rejection of the UN plan--the extreme defeatism in the US camp began to dissipate:
"The aura of military disaster still hovered in their minds when Collins and Vandenberg departed Japan for the peninsula. But once in Korea, they found a much improved situation. After visiting numerous front line units, they reported to Washington on January 17, 1951, that the Eighth Army was far from being a defeated command, that under the leadership of Lieutenant General Matthew B. Ridgway, General Walker's successor (Walker died in a jeep accident on December 23), the army was being revitalized. They said they had found high morale and self-confidence.
"This good news was unexpected. It now appeared to the United States government that a military disaster was not in the making. The JCS study presented to MacArthur, which had outlined possible extreme American reactions, was abandoned. As confidence slowly returned, the United States moved to brand Communist China an aggressor and to initiate U.N. collective action against her...." Carl Berger, *The Korea Knot: A Military-Political History* (Philadelphia: University of Pennsylvania Press 1957), p. 133. http://www.archive.org/stream/koreaknotamilita027506mbp/koreaknotamilita027506mbp_djvu.txt Within a couple of months, Seoul was to be recaptured by US/UN forces, and was never again to be in Communist hands.
Which of course leads to the big question: What if Mao had accepted the UN cease-fire resolution in January? What would be the consequences of a South Korea even poorer and more agricultural than it was in OTL in the 1950's and of a larger and more powerful North Korea? And what would happen to Taiwan? (There would be sure to be a loss of morale there, and his partial victory in Korea might embolden Mao, and would in any event allow him to re-deploy some troops from Korea to the Taiwan Straits. OTOH, the very fact of defeat in Korea might make the US more determined than ever to hold on to Taiwan.) Finally, what are the domestic consequences in the US--if a stalemate in Korea hurt Truman politically, what would a defeat (if not quite a total one) do? (There will no doubt be GOP calls for Truman's impeachment, yet by 1952 Truman might actually be a little more popular than he was in OTL--which admittedly is not saying much--because even a bad peace might be less unpopular than a seemingly endless stalemate.)
Admittedly, it is difficult to see Mao voluntarily agreeing to stop when the situation looked so favorable for him. The only POD I can think of would be pressure by Stalin on Mao, and that in turn would be only likely if Truman had privately made some sort of drastic threat to Stalin and the latter was convinced it was not a bluff.
. This is a huge loss for the world economy.
