Here is the House Rule we came up with regarding China:
Once China gains control of ALL Chinese territories, including the coastal territories that start the game under Japanese control, then Chinese forces are allowed to move outside of China’s borders and enter other nation’s territories. This includes attacking any Axis forces currently occupying said territories and liberating them for the Allied countries.
If an Axis power takes control of ANY Chinese territory, Chinese units are no longer permitted to leave China and any Chinese units that are currently in territories outside of China are no longer allowed to enter further non-Chinese territories. They must remain in the territory they are in OR return to China.
Once the territory(s) under Axis control have been recaptured, the movement restriction for Chinese units are again lifted.
New Chinese units MUST ALWAYS be placed within China.