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The major difference between these two groups was that the Communist Party was, of course, communist while the Kuomintang wanted a republican form of government. The two groups did work together for a while. They were both interested in defeating the warlords and bringing China under a unified national government once more. The Communists also had orders from the Comintern (international communist organization headed by the Soviet Union) to cooperate with the KMT.
However, they eventually came to disagree over political ideology. The KMT believed that communism would prevent the consolidation of a united China. This led to the civil war in China that can be said to have begun in 1928.
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