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Thanks to everyone for their kind comments and feedback.

I think the Chauchat is realistically the best option for the Nationalist Republic of China to manufacture. Yes it's a nasty gun that barely works but it's just about the right level of manufacturing capability for an arsenal that just started. Keep in mind that Chiang has about 200,000 - 400,000 troops to outfit - getting any sort of light machine gun is an achievement. It's a nasty gun yes - but it's better than having no light machine gun.

We also have to realize that the main factor affecting the performance of KMT troops is not equipment (although that does help) but training, morale and logistics. OTL's Nationalist troops were poorly fed and poorly-led with divisions frequently disintegrating after being defeat. ITTL Chiang's experience in the Western Front as a german grunt leads him to make reforms that makes life for Nationalist soldiers at least bareable (if barely)

1924 - Steam. Wind. Iron - The 2nd Year of Consolidation

1924 was another year of consolidation and achievement for the Kuomintang government in South China. In the public sphere land reform programme was attempted, infrastructure constructed, a system of tax reform implemented and a National Assembly elected. To cap it all off KMT diplomats managed to achieve recognition for Sun's regime from an unlikely source. In the military field a Nationalist Navy founded and a National Revolutionary Army Air Force were established.

Public Sphere Reforms

A comprehensive programme of reform was spearheaded by T.V Soong, the ambitious and talented Minister of Finance who followed in his father's footsteps. The late 'Charlie' Soong who had passed away the previous year. An ambitious programme of rent reductions, KMT backed guarantees of tenure security and the formation of village cooperatives revolutionized the country side. Complementing this ambitious package was an education reform programme and a reform of the tax system. The former would secure middle and rural backing for the already broad based Kuomintang, the latter would exploit the backing by turning it into hard dollars.

This would take the form of a land tax levied on villages with the responsibility of collection falling on the local KMT cadres (who also provided the base for the tenure security and education programme - in this way the villagers could see that they were getting 'value for money.' In that their taxes were actively contributing to their well-being.) In the cities - a land tax was considered impractical so an income tax and import duties were levied. Complemeting this package was a small fixed sales tax (5%)

Major infrastructure projects were also initiated with the emphasis placed of constructing and expanding the mineral infrastructure in Yunnan and an adequate transport to export them.

The commulative effects of these reforms was to ensure that the Kuomintang government had a firm foundation and finally had a secure income stream. Combined with significant donations from the Overseas Chinese Community the government's books reached a near-balance in 1924 despite the major expenditures.

The Italian government under new management by one Bennito Mussolini also recognized the Guangzhou government as the rightful government of China.

The foundation of the Nationalist Navy

The year 1924 also saw the foundation of the Nationalist Navy. The 'navy' consisted of purchased merchant steam ships hastilly outfitted with a field gun. The largest and most well-armed ship in the Nationalist Navy was the 'Guangjia' composite cruiser built during Qing times. It was a 1300 ton cruiser with four 5 inch Krupp breechloaders and one 6 inch breech loader.
A naval curriculum was added at the Whampoa military academy in true Whampoa fashion it was taught by a combination of professional German instructors, maverick white russian emigres and proselytizing Soviet advisors.

The foundation of the National Revolutionary Army Air Force

The leading pioneer of the National Revolutionary Army Air Force was undoubtedly "Feng Ru" known as the 'Father of Chinese Aviation.' Miraculously escaping from a plane crash he suffered in 1912 - Feng Ru quickly recovered offering his service to Sun Yat-Sen. For many years he had been attempting to secure funding from the Nationalist Government but had been thwarted because of other priorities. In 1924 he was authorized to lead an official expedetion to Europe to purchase aircraft and licenses for the Air Force. He would return in 1925 after taking a year to visit and speak to Italian, German, French, English and even Soviet aircraft manufacturers.

Next update: 1925 The third year of Consolidation