Although the Fronts main decision-making body was briefly transferred to the Saigon-Cholon area, its power base was still in rural areas, mainly controlled by the Hòa Hảo Buddhist congregation and the Cao Đài movement. Many Front paramilitary units remained under tactical control of Nguyễn Bình who was elevated to the post of the Việt Minhs chief military delegate in the south. Therefore, the Fronts leadership acknowledged that the organization became unable to expand and a major strategy revision was urgently needed.
After some hot debate, the central committee of the National Coalition Front decided to move the bulk of its activities to Hậu Giang area, notably to the 8th military zone of Đồng Tháp and the 9th military zone of U Minh. According to the new strategy, all the Fronts paramilitary units were to be moved out of the Việt Minhs controlled 7th military zone to Đồng Tháp and U Minh. The new plan of action also involved the closure of the loosely structured National Coalition Front and the creation of a coherent, party-like organization. In line with the new plan of action, on September 21, 1946 the Social-Democratic Party was formed. The party also launched its own newspaper, the Masses, or Quần Chúng, so as to oppose the Communist propaganda campaigns.
The new strategy of the nationalist forces aimed at creating a strong base in the 8th and the 9th military zones, isolating Nguyễn Bình in the 7th military zone, as well as allying with those anti-Communist Vietnamese nationalists who fled to South Chinas provinces controlled by the Chungking government.
In order to implement the new plan of action, one of the Social-Democratic Partys leaders, Nguyễn Bảo Toàn, was sent to China to negotiate with exiled Vietnamese nationalists. As a result, on February 27, 1947 a Unified Countrywide National Front, or Mặt Trận Quốc Gia Thống Nhứt Toàn Quốc, was created in Nanning, South China. It included the Social-Democratic Party, the Caodaist congregation, Quốc Dân Đảng, nationalist trade unions and youth movement, as well as Vietnams Revolutionary Alliance, or Việt Nam Cách Mạng Đồng Minh Hội. Veteran nationalist and head of the Alliance, Nguyễn Hải Thần, was elected the Fronts chairman. Nguyễn Bảo Toàn became the Fronts general secretary as representative of Hòa Hảo Buddhism and Caodaism, while Nguyễn Tường Tam of Quốc Dân Đảng served as external relation head. Nguyễn Văn Sâm became the Fronts chief delegate in the South. Trần Văn Tuyên and Lưu Đức Trung also affiliated.
The nationalist forces in the South were keen to avoid further confrontation with the Việt Minhs Administrative Committee of Resistance in the South, or Ủy Ban Hành Chánh Kháng Chiến Nam Bộ. In line with this tactical line, on November 14, 1946, Huỳnh Phú Sổ became a “special member, or Ủy viên đặc biệt, of the Administrative Committee. However, when Nguyễn Bình suggested sending Việt Minh political agitators to the nationalist units under his command he was repeatedly turned down. Nguyễn Bình also elevated Lê Văn Viễn to the post of the 7th military zones commander aiming at integrating the Bình Xuyên troops into the Việt Minh army, yet it only sparked further tensions between two leaders.
Nonetheless, around this time Huỳnh Phú Sổ repeatedly visited guerrilla hideouts in the 7th military zone. During French airstrikes and artillery barrages, he showed personal courage and determination. Although Huỳnh Phú Sổ was armed with a handgun, he never used it. Vương Kim, 1975, p.236. He also had repeated encounters with Nguyễn Bình and Bình Xuyên leaders, including the 25th regiment commander Bùi Hữu Phiệt.
In early April 1947, the Cao Đài, the Hòa Hảo, Đại Việt and Bình Xuyên delegates held a secret meeting inside Tây Ninh Holy See, chaired by Caodaist leader Phạm Công Tắc. They finalized a plan to remove the nationalist units from the 7th military zone and on April 5 an order was given to them to relocate to the Hậu Giang area. However, Nguyễn Bình ordered his troops to stop the evacuation. The 12th regiment under Huỳnh Tấn Chùa and the 18th regiment under Nguyễn Văn Xuyến repeatedly attacked outgoing nationalist forces. Moreover, the Việt Minh secretly tipped the French military and subsequently the French airforce carried out repeated airstrikes against the retreating nationalist units. Although some Hòa Hảo and Đại Việt units managed to reach Đồng Tháp Mười, the Cao Đài and Bình Xuyên forces stayed behind. Therefore the strategic objective to set up a nationalist stronghold in Đồng Tháp Mười failed to materialize. Moreover, the mysterious disappearance of Huỳnh Phú Sổ dealt a decisive blow to the Unified Countrywide National Front. For that reason the nationalist forces of the South failed to seize a strategic initiative in the resistance war.
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