MacArthur felt that the North Korean army had been essentially destroyed by the middle of October, and, against the recommendations of the Joint Chiefs of Staff, he sent his forces into the northernmost parts of North Korea. His troops were hit by surprise and decimated when Chinese Communists troops began attacking his forces. On October 25, the PRC made an attack on ROK soldiers and routed them at Pukchin. On November 1, the Chinese defeated American troops at Unsan, in the first Chinese-American combat of the war. When MacArthur tried to order bombing raids against some bridges near the Manchurian border, Truman and the JCS delayed the bombings out of fear that errant bombs might land in Manchuria. On November 7, a US Congressional Election was held, which, although it preserved the Democratic Party majority, was viewed by many as a referendum criticizing Truman's Korean War policy.
At this point (November 1950), the Korean Conflict became "an entirely new war." The Eighth Army withdrew to fortified positions while MacArthur prepared a new offensive. MacArthur reinitiated the bombing campaign against bridges in the northernmost provinces, but succeeded in destroying only a third of them. The Chinese had become excellent fighters during their extended civil war and their battles against the invading Japanese during WWII, and put up a ferocious fight, even surrounding the vaunted X Corps at Chosin Reservoir. In December and January of 1951, US/UN/ROK forces continued retreating. Truman announced in a press conference that the US was considering using the A-Bomb. Defense spending for the US had reached $55 Billion for the Fiscal Year 1952 budget, up from $13 Billion annually before the Korean War.
On December 23, 1950 General Walton H. Walker died in a car accident, giving Lt. General Matthew Ridgway command of US/UN/ROK ground forces in Korea. Ridgway was well liked by both MacArthur and the JCS, who now dealt with Ridgway more often than MacArthur. On January 4, 1951, Ridgway evacuated Seoul and Inchon. From there, Ridgway rebuilt the confidence and morale of his men, by getting better food and warmer coats for them. Ridgway also improved the quality of Mobil Army Surgical Hospitals (MASH) under the philosophy that men who have a chance of living will fight harder. Starting with operation Thunderbolt, Ridgway and his US/UN/ROK forces went on the offensive again, righting the war of attrition that had developed since the involvement of the Chinese. In March, Operation Ripper succeeded in retaking Seoul from the PRC.
Ridgway's striking success upset MacArthur, who realized Ridgway's successes in Korea were undermining MacArthur's justifications for attacking Chinese territory. MacArthur badmouthed Ridgway's conservative strategy as one of stalemate, leading US troops to label Ridgway's strategy as "Die for Tie."
Why did the PRC intervene in Korea? The PRC wanted to preserve a North Korean Communist State, but not to dominate it. Instead, the PRC wanted North Korea to serve as a buffer between Manchuria and the US dominated South Korea. The PRC viewpoint made a certain amount of sense. After all, since the US broke its promise not to cross the 38th Parallel, what reassurance could the Chinese have that the US would keep its promise and not cross the Yalu? Resolving to use force, PRC leaders decided that if they were going to fight the US, the initial attack would have to be as efficient as possible. For this reason, they planned a surprise attack, secretly moving troops across the Yalu. China, using the element of surprise, did not declare war. Furthermore, so that it could officially disavow responsibility, the PRC troops claimed to be "volunteers."
Some historians claim that MacArthur, in sending his troops to the northernmost provinces of Korea, was deliberately trying to get the PRC to intervene, in hopes of restarting the Chinese Civil. The generally accepted consensus is that he moved farther north simply because he believed the Chinese would never attack American units. Interestingly, after taking Pyongyang, American troops were so overjoyed and convinced that the war was over, that they discarded heavy ammunition and helmets. This premature celebrating came to haunt them when the Chinese intervened soon after.