All of his recent news about China and Hong Kong has me interested in Chinese history, specifically concerning the rise of the Communist Party. My main source of information has been this documentary series here: https://www.youtube.com/watch?v=PJyoX_vrlns (linking the relevant part).
However, one bit that confuses me is how could Mao Zedong have possibly stayed in power after The Great Leap Forward. I'm aware that the party put on a huge misinformation campaign to divert the blame from themselves, blaming natural causes and downplaying just how severe the famine was. But literally millions of people died because of Mao's policies, yet somehow no one thought to rise up against him, not even members of his own party? China was basically in perpetual war since the turn of the century, and Mao's government was still young and relatively weak, surely he could have been thrown off if the sentiment was popular enough. I'm also aware that Mao was still largely considered a national war hero, but at this stage, China was worse off than it had ever been in living memory. Considering the public's wishy-washy history with the Communist Party in the first place, was tossing him aside really that inconceivable?
Also, what were the Nationalists doing at this time? This seems like the perfect opportunity for them to strike and take back the mainland. Were they afraid the public sentiment would still be against them (even after the famine)? Were they just not ready?
All constructive responses are appreciated. Thank you!
EDIT: Formatting
Mao is a controversial topic both in the West and in China, and the reason for this is that it is legitimately kind of difficult to assess his time in power in China. Now, I have written previously on AH about historians' views of Mao, particularly those of the ones I know personally. They don't like Mao and think that, after 1956 or so, he was pretty incompetent to a dangerous degree. This is a view held by even his former colleagues. Actually, for most of this answer I will be relying mainly on China Under Mao: A Revolution Derailed by Andrew Walder. Anyways, Chen Yun, an official who had been unpopular with Mao for a long time due to his moderate views, said this in 1978:
“Had Chairman Mao died in 1956, there would have been no doubt that he was a great leader of the Chinese people, a respected, loved and outstanding great man in the proletarian revolutionary movement of the world. Had he died in 1966, his meritorious achievements would have been somewhat tarnished but still very good. Since he actually died in 1976, there is nothing we can do about it.”
This is an interesting quote, if restrained, and reflects a larger view. Deng Xiaoping of course walked back on many of Mao's policies once he took power. The truth is that your statement is a little off. China was not the worst off it had been in living memory. Under Mao, China developed into a better place to live in many ways. For example, the death rate in 1953 was nearly 26 per 1000. By 1976, that had dropped to about 8. Infant mortality, which had been at 175 per 1000 in 1953, dropped to 45 in 1976. Life expectancy rose from 40 years old in 1953 to 64 years old in 1976, which was incredible. All of this was a result of a government that went to great lengths to provide healthcare to the vast majority of people. In addition, the government quite successfully cracked down on the drug trade, organized crime, and sex trade. The GDP increases were also massive under Mao. Agriculture and industry gross output increased by ten times under Mao.
However, the issue was that China's population also rapidly increased during this time, nearly doubling after 1952. This meant that the GDP per capita increase was lower, only around the level of the Philippines during the time. Mao refused to implement fertility control measures because he refused to blame the poor for their own poverty, but it really hurt the country in terms of living conditions.
You say that he was not challenged in the wake of the Great Leap. In fact, he was challenged, most prominently by Deng Xiaoping and Liu Shaoqi, who were the architects of very successful economic development for China, both during and after the Mao era (in the case of Deng). I write about their challenges elsewhere, and what happened to each of them as a result here. Mao's power was actually weakened considerably after the Great Leap, and he sort of "retired" at the point. In fact, the Cultural Revolution was, in part, his move to regain power in the wake of Liu Shaoqi in particular becoming very important. He started the movement in secret and used his carefully-cultivated cult of personality among the Chinese people to remove his enemies. The communist party was extremely popular during the early "honeymoon period" into the mid-1950s, and Mao had wisely capitalized on that.
As for the Nationalists. The Guomindang at that time were mainly consolidating their power in Taiwan, as well as focusing on developing their own economy in Taiwan. During this period, the Guomindang placed Taiwan under martial law, called the White Terror. Despite the horribly oppressive regime (the longest period of martial law in the world), the economic development, first under Yin Chung-yung, and then even more successfully under Li Kwoh-ting, was much wiser and larger than Mao's attempts. Taiwan became the fastest-growing economy in the world eventually, in fact.
Sources:
China Under Mao: A Revolution Derailed by Andrew Walder
Mao's Last Revolution by Roderick MacFarquhar and Michael Schoenhals
"A Bastion Created, A Regime Reformed, An Economy Reengineered, 1949-1970" by Peter Chen-main Wang in Taiwan, A New History edited by Murray Rubinstein