WHEN the Geneva Agreement of 1954 terminated the fighting in Indochina on the basis of the partition of Viet Nam along the seventeenth parallel, most observers felt that the Communists had won a striking victory. Their conquest of the North, with somewhat more than half of Viet Nam's 26 million people, most of its mineral deposits and the bulk of its modest industrial establishment, represented the most important Communist territorial advance since the collapse of Nationalist China and posed an ominous challenge to all of Southeast Asia.

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