Quest to Transform Southeast Asia } 215
amnesty, while the rest had fled into southern Thailand around the town of
Betong. The CPM had only 350 core fighters remaining, in deep jungle areas
of Malaya, and it finally ordered them to break into small groups and in-
filtrate into Sumatra and Singapore.^45 In December 1959, the CPM center in
Betong decided to suspend armed struggle and return to political struggle.
Absence of contiguous territory controlled by a “fraternal party” was a major
factor in this decision.^46 The CPM was also guilty—by its own admission—of
Chinese ethnocentrism, with Chinese CPM members riding roughshod over
ethnic Malays and Indians. CPM leaders in Betong reported to Beijing via
radio the decision to quit armed struggle. Reports Chin Peng:
We looked to Siao Chang [head of the CPM Beijing office] for direc-
tion. After all, he had been so long in Beijing and had established ex-
tremely good contacts with the CCP hierarchy. What was more, he was
sounding out top CPC officials and interpreting their opinions on our
intended return to political struggle.^47
CPM leaders, with Siao Chang’s continuing participation, drafted a demobi-
lization plan for ending armed struggle in accord with the directive from Beijing.
“Nothing could move ahead without China’s consent,” according to Chin Peng.
Accordingly, Siao Chang began lobbying Chinese leaders. Several months
passed before CCP leaders weighed in on the CPM’s abandonment of armed
struggle. In the meantime, Beijing accepted a CPM proposal to put in place
a mechanism for CCP funding of the CPM. Two businesses were established
in Bangkok, headed by Thai communists and ostensibly operating as purely
commercial enterprises, to serve as conduits for funding the CPM. According
to Chin Peng, the CCP allocated 4 million Thai baht (equivalent then to about
US$200,000) annual subsidy for the project. The amount of cash moving from
the CCP to the CPM soon exceeded the capacities of the two front companies.
Movement of suitcases of cash by couriers faced multiple dangers: arrest, rob-
bery, embezzlement, and the sheer weight of shipments. Eventually, a mech-
anism was established via “respectable” channels—apparently banks—which
continued to function into the 1980s. Inadequate funding had been a perennial
CPM problem. The flow of CCP money, US dollars actually, alleviated this pre-
viously serious problem. CCP-supplied US dollars were used to purchase arms
on Southeast Asian black markets.^48 This put several degrees of distance be-
tween China and the Malaya insurgency.
Chin Peng was among those who fled to southern Thailand in late 1959. He
proceeded via Bangkok and Hanoi to Beijing, arriving there in June 1961 after
a long and difficult journey. He was accommodated by the CCP’s International
Liaison Bureau in the secret compound discussed earlier in this chapter.
When he met with Secretary General Deng Xiaoping, he was astonished to
hear Deng propose that the CPM resume armed struggle, relying, this time,
on the experience of revolutionary forces in Vietnam. Though shocked that