The Phoenix Pencil Company is set against the backdrop of two devastating conflicts that reshaped China, the Second Sino-Japanese War (1937-1945) and the subsequent Chinese Civil War (1945-1949). The novel opens in 1937, the year Japan launched a full-scale invasion of China to expand its economic and political control over East Asia. When Meng and her mother flee for Shanghai, they seek refuge in the Shanghai International Settlement. This unique, foreign-administered enclave temporarily shielded residents from the worst of the fighting, though it was quickly overwhelmed. Hundreds of thousands of Chinese refugees flooded into the foreign settlements following the brutal Battle of Shanghai, which raged from August 13 to November 26, 1937, featured chemical weapons, and caused hundreds of thousands of casualties. In the novel, Yun’s family is “insulated from much of the violence, thanks to the International Settlement” (17), but they still face food scarcity and the dangers of a city under occupation.

Although Chinese Nationalists and the Communist Party fought together against the Japanese under the banner of the United Front, the two factions resumed hostilities following Japan’s surrender in 1945. Chiang Kai-shek, the ruling Nationalist leader, and Communist leader, Mao Zedong, met to negotiate China’s political, economic, and social future, but fighting broke out between the groups’ militaries before these reforms were enacted. The Chinese Civil War ended in a Communist victory on the mainland in 1949 and the flight of millions of Nationalist soldiers, officials, and civilians to Taiwan. This mass exodus is reflected in the novel when Yun’s father, a Nationalist intelligence officer, announces that the family must leave for Taiwan in 1948, fearing retribution from the approaching Communist forces. This historical upheaval is the direct cause of Yun and Meng’s lifelong separation, creating the central rift that Monica later attempts to heal.