Decided during the Yalta Conference in February 1945, and after the surrender of the Japanese, the Korean Peninsula was along the 38th parallel divided into two countries: In the north the Democratic People's Republic of Korea (DPRK, in Korean Chosŏn Minjujuŭi Inmin Konghwaguk 朝鮮民主主義人民共和國, in Chinese shortly called Bei Chaoxian 北朝鮮 or simply Chaoxian 朝鮮, in Taiwan Beihan 北韓), and in the south, the US-backed Republic of Korea (Daehan Minguk 大韓民國, in Chinese short Hanguo 韓國) under President Syngman Rhee 李承晩 (r. 1948-1960). Stimulated by the departure of U.S. forces and the weakness of the South Korean army, and believing that the world would—like in 1931, when the Japanese occupied Manchuria—not greatly respond to an invasion, the North Korean leader Kim Ilsŏng 金日成 (r. 1948-1994) on June 25, 1950, began the occupation of the southern part of the peninsula. Indeed, North Korean troops quickly advanced and were able to take most of the territory, barring the southeastern corner around Pusan 釜山. Yet the U.S. troops under General Douglas MacArthur (1880-1964) reacted quickly, landed in Pusan and then in Inchŏn 仁川 just south to Seoul, and threw back the North Koreans. At one point the International Troops even reached the Yalu River 鸭绿江 at the border to China. The Seventh U.S. Fleet cruised the Taiwan Strait, and U.S. troops were brought to the Philippines and supported French troops in Indochina.
The PRC saw herself immediately threatened, even more as MacArthur advocated an extension of the war onto the territory of China, in order to safeguard the KMT regime in Taiwan and to roll back the advance of communism. There were fierce debates among the CPC leadership whether China should intervene or not. Chen Yun 陈云 (1905-1995) and Peng Dehuai 彭德怀 (1898-1975), who were critical towards Chinese involvement into the war, were overruled, because too much was to be risked in case the U.S. should attack China by invading the industrial zone in the northeast. Moscow backed the Chinese leaders and promised in turn diplomatic and military help. Yet internationally in a weak, position, China did everything to avoid the impression of invading Korea, and therefore created and propagated an army of "volunteers" (zhiyuanjun 志愿军). On October 16, 1950, these volunteers crossed the Yalu in large numbers, and soon gained the initiative in the fights with South Korean or U.S./UN troops and threw them back to approximately the line where all had begun. Then equipped with better material, the defenders withstood further pressure, and therefore in summer 1951, negotiations about an armistice began. Only after the death of Stalin, the armistice was signed, at P'anmunjŏm 板門店 on July 27, 1953.
In China, the Korean War was known as the Anti-U.S. War for the Support of Korea (Kang Mei yuan Chao zhanzheng 抗美援朝战争). The loss of lives on the Chinese side was considerably: Close to a million death, among them the son of Mao Zedong and many party cadres. The most damaging effect of the Korean War was the postponement of industrial development for some time, either because young technicians had to serve, or because production went into the war effort. In the political sphere, the War with its patriotic and ideological appeals supported the young regime, created quite a few new heroes, and showed that New China was able to withstand the strongest power of the Western world. There would be hope to reconquer Taiwan one day. Yet on the Western side, the Korean War strengthened ties of alliance and deepened the decision to defend Japan and Taiwan. It also postponed China's eventual entry into the United Nations.