Hmm, this will need to be looked at.
An unofficial solution (this is my opinion only and not from HBG), would be to have all Chinese collect income at the same time. Probably end of the round (after Nat China and US). Try this out and let us know.
Don’t think you could count all Chinese income at the end of the round, because Japan goes between the two Chinese factions. If the Red Chinese take a territory from Japan, then Japan takes it back on their turn, then the Red Chinese would have lost out on the income for their temporary advance. Could possibly tally up both at the end of the Red Chinese turn though (would be no Japanese involvement).
If you really think it is a problem, then just have one Chinese power actually hand over the IPC(s) stolen from the other in a territory swap (instead of from the bank) it wouldn’t be two hard to track on the Chinese turns. Could be like they also seized equipment. That way they wouldn’t be double dipping. The next turn if they still control that territory, then the income would be paid from the bank as normal.
I guess overall this could be a problem, but once the Japanese get going there isn’t going to be much swapping (maybe a territory or two). Plus the two western Chinese territories at the Russian border have no value. If the Japanese start losing the fight for Asia, then there could be some swapping even for the coastal Chinese territories. Not sure if this is that big a deal, but could see people figuring out ways to exploit it.
At least the Chinese don’t get partisans (like Russia), that would really screw the Japanese.