A fierce anti-communist and shadowy man of mystery, General Dai also commanded the Loyal Patriotic Army (LPA), a large militia force active in Japanese-occupied interior regions of China.

In April 1943, SACO began setting up camps (later known as units when Naval Group China was established) to train Chinese guerrillas in small arms, demolition, sabotage, combat techniques, radio handling, aircraft and ship recognition, and aerology.

The "Rice Paddy Navy" or "What-the-Hell Gang" operated in the China-Burma-India theatre, advising and training, forecasting weather and scouting landing areas for USN fleet and General Claire Lee Chennault's 14th AF, rescuing downed American flyers, and intercepting Japanese radio traffic.

An underlying mission objective during the last year of war was the development and preparation of the China coast for Allied penetration and occupation.

[3] For a long period after the Communist victory in the Chinese Civil War, SACO became associated with imperial foreign aggression and atrocities of the revolution were attributed to sinister US involvement.