If we look at China in AA 1940 the main issue is that the game is the main problem, keep the game simple. If you introduce terrain into the game then China becomes a totally different beast to handle.
Kansu, Suiyuyan, Tsinghai and Shensi are basically a huge desert wasteland, high altitude and very nasty winter weather. In the real war Japan had 0 interest in marching a army over thousands of miles of desert wasteland. Then again in 1940 that is the ideal path for Japan to help against Russia.
Sikang, Szechwan, Yunnan and Kweichow are dominated by mountains and steep valleys. It is treacherous and not a very fun place to mount combat operations in. Once again in real life Japan had 0 interest in getting into a massive fight with entrenched China soldiers in mountains. But in 1940 not a big deal, in fact the path to India goes through Yunnan.
In real life there was basically no desire or effort to take out all of China. All the important areas of China are found on the coastlands and not in the mountains. Japan was perfectly content to play a defensive war with China and keep them pinned up in their mountains. Then maybe the Communist and Nationals might just start fighting each other in the process.
The simplicity of Axis and Allies is the main hang up with China. China was not simple for Japan when it comes to terrain and climate. Which has 0 effect when playing A&A.
In the real war Japan got around the nasty mountains of Yunnan by going through FIC, Shan State, Burma. They by passed all that nasty terrain and went through South East Asia. Japan was held off at the border of India for the entire war.
How did India hold out the entire war against Japan aggression on its Eastern border? Oh, yeah, there is this nasty mountain chain that runs between Burma and India and when you get close to the coast line it is all river/swamp/jungle fighting.
