With the end of the war with Japan, the Chinese Civil War resumed between the Communists and Nationalists. While the Communists were struggling for supremacy in Manchuria, they were supported by the North Korean government with matriel and manpower. According to Chinese sources, the North Koreans donated 2,000 railway cars worth of supplies while thousands of Koreans served in the Chinese People's Liberation Army (PLA) during the war. North Korea also provided the Chinese Communists in Manchuria with a safe refuge for non-combatants and communications with the rest of China.
The North Korean contributions to the Chinese Communist victory were not forgotten after the creation of the People's Republic of China in 1949. As a token of gratitude, between 50,000 and 70,000 Korean veterans that served in the PLA were sent back along with their weapons, and they later played a significant role in the initial invasion of South Korea. China promised to support the North Koreans in the event of a war against South Korea. The Chinese support created a deep division between the Korean Communists, and Kim Il-sung's authority within the Communist party was challenged by the Chinese faction led by Pak Il-yu, who was later purged by Kim.
After the formation of the People's Republic of China in 1949, the Chinese government named the Western nations, led by the United States, as the biggest threat to its national security. Basing this judgment on China's century of humiliation beginning in the early 19th century, U.S. support for the Nationalists during the Chinese Civil War, and the ideological struggles between revolutionaries and reactionaries, the Chinese leadership believed that China would become a critical battleground in the United States' crusade against Communism. As a countermeasure and to elevate China's standing among the worldwide Communist movements, the Chinese leadership adopted a foreign policy that actively promoted Communist revolutions throughout territories on China's periphery.
On 27 September, MacArthur received the top secret National Security Council Memorandum 81/1 from Truman reminding him that operations north of the 38th parallel were authorized only if "at the time of such operation there was no entry into North Korea by major Soviet or Chinese Communist forces, no announcements of intended entry, nor a threat to counter our operations militarily". On 29 September MacArthur restored the government of the Republic of Korea under Syngman Rhee. On 30 September, Defense Secretary George Marshall sent an eyes-only message to MacArthur: "We want you to feel unhampered tactically and strategically to proceed north of the 38th parallel." During October, the ROK police executed people who were suspected to be sympathetic to North Korea, and similar massacres were carried out until early 1951.
On 30 September, Zhou Enlai warned the United States that China was prepared to intervene in Korea if the United States crossed the 38th parallel. Zhou attempted to advise North Korean commanders on how to conduct a general withdrawal by using the same tactics which allowed Chinese communist forces to successfully escape Chiang Kai-shek's Encirclement Campaigns in the 1930s, but by some accounts North Korean commanders did not utilize these tactics effectively. Historian Bruce Cumings argues, however, the KPA's rapid withdrawal was strategic, with troops melting into the mountains from where they could launch guerrilla raids on the UN forces spread out on the coasts.
By 1 October 1950, the UN Command repelled the KPA northwards past the 38th parallel; the ROK Army crossed after them, into North Korea. MacArthur made a statement demanding the KPA's unconditional surrender. Six days later, on 7 October, with UN authorization, the UN Command forces followed the ROK forces northwards. The X Corps landed at Wonsan (in southeastern North Korea) and Riwon (in northeastern North Korea), already captured by ROK forces. The Eighth U.S. Army and the ROK Army drove up western Korea and captured Pyongyang city, the North Korean capital, on 19 October 1950. The 187th Airborne Regimental Combat Team made their first of two combat jumps during the Korean War on 20 October 1950 at Sunchon and Sukchon. The missions of the 187th were to cut the road north going to China, preventing North Korean leaders from escaping from Pyongyang; and to rescue U.S. prisoners of war. At month's end, UN forces held 135,000 KPA prisoners of war. As they neared the Sino-Korean border, the UN forces in the west were divided from those in the east by 50100 miles of mountainous terrain.
Taking advantage of the UN Command's strategic momentum against the communists, General MacArthur believed it necessary to extend the Korean War into China to destroy depots supplying the North Korean war effort. President Truman disagreed, and ordered caution at the Sino-Korean border.