Then, the game design is flawed, even before knowing the true setup. China not allowed go out of China (and the whole minor popping inf status) is bugged. Minor popping inf status leads to some minor bugs involving conquered ICs and aa guns (but at least it will happen few times)
China not allowed attack Japaneses leads to avoid China strat. What if Chineses conquer both Manchuria and Kwantung? OK, it’s 11 IPCs less (6 for lovers of only-mandatory-stuff) , but you would need about the same amount to fight the chineses with uncertain result. Now you can focus in any IC UK could buy (Australia or mainly India) without caring about Chineses. Evacuate both territories J1 and aim for USA or Moscow (your choice, if allies try ignore Japan strat) or simply Moscow if allies go global war strat. What about VCs? Well, allies need more than 2 vcs to win and anyway you have India and Australia at your reach. Simply conquer Moscow or California and it’s game won for axis anyway, you don’t have to care of china in all the very game
Only Hong Kong could do anything, but it would need a IC :-o, a succesfull tech roll on improved industry and then start building ships there :-P. But many will not allow tech :-P and still the deploy of this strat (another bug, by the way) would cost at the very least 20 ipcs and any costly ships you could buy (ships that can be destroyed easily by Japan’s navy unless they are beaten anyway)
The best and simpler is mod that buggy rule: change “China cannot go out China” for “China cannot enter allied territories but they can attack axis territories at pleasure”. Or, of course, make China a normal playable country with normal IC and such, as should.
I think at least some players will try avoid China, think how many players ignore Japan now (and Japan can go out Japan, opposite to China :-D ). Modding is needed I fear.