The "loss of China" refers, in U.S. political discourse, to the unexpected Communist Party takeover of mainland China from the American-backed Nationalists in 1949, and therefore the "loss of China to communism". The "loss of China" was portrayed by critics of the Truman Administration as an "avoidable catastrophe". It led to a "rancorous and divisive debate" and the issue was exploited by the Republicans at the polls in 1952. It also played a large role in the rise of Joseph McCarthy, who, with his allies, sought scapegoats for that "loss", targeting notably Owen Lattimore, an influential scholar of Central Asia.
During World War II, Franklin D. Roosevelt had assumed that China, under Chiang Kai-shek’s leadership, would become a great power after the war, along with the U.S., the United Kingdom, and the Soviet Union. According to John Paton Davies Jr. (one of the so-called "China Hands", whose diplomatic career was later ruined by the loss of China), Roosevelt's lack of sufficient material support to Chiang Kai-shek during the war against Japan in the 1930s and 1940s and his deplorable choices of U.S. diplomatic emissaries to China contributed to the failure of Roosevelt's policy.
According to historian Arthur Waldron, "Franklin Roosevelt thought of China as a power already securely held by [Chiang Kai-shek]." Chiang Kai-shek's hold on power was, however, tenuous, and "once the Japanese were defeated, China would become a power vacuum, tempting to Moscow, and beyond the capability of the Nationalists to control. In that sense, the collapse of China into communism was aided by the incompetence of Roosevelt’s policy."
Noam Chomsky, a leading critic of U.S. foreign policy, has commented that the terminology "loss of China" is revealing of U.S. foreign policy attitudes:
The American historian Miles Maochun Yu complained in a 2010 book review of the "...endless fight over who got it right on China, whatever the Chinese reality. That is to say, the peculiar debate on Communist China, the questions asked and issues debated often reflected American partisan politics and policy spins rather than Chinese reality". In the early 1950s, the Truman administration was attacked for the "loss" of China with Senator Joseph McCarthy charging in a 1950 speech that it was "Communists and queers" in the State Department whom President Harry S. Truman had allegedly tolerated were responsible for the "loss" of China. In a speech that said much about fears of American masculinity going "soft" that were common in the 1950s, McCarthy charged that "prancing minions of the Moscow party line" had been in charge of policy towards China in the State Department while the Secretary of State Dean Acheson was a "dilettante diplomat who cringed before the Soviet colossus".