I don't understand why they don't control Canton, it would make sense to me that they would have that city under their control.
Well, why don't they control Wuhan, or the rest of the North China Plain, or the middle Yangtze? Ultimately there is a lot of handwaving going on here to have these things not happen - the Japanese more or less managed to get into their stock-1942 positions within a year and a bit of the war starting. The basic starting point I was given was essentially "Japan buggers up the Shanghai-Nanjing campaign spectacularly", so extrapolating from that - I've basically gone for "Japan Really Doesn't Want another huge, messy urban battle that'll wipe the stuff they're trying to make an economic prospect out of off the map".
The outline timeline going on in my head looks something like this:
- Nothing much happens in 1937. There will be the usual run of 'incidents', but I guess everyone rolls hard sixes and nothing major comes of them. The Kwantung Army is making crazy smuggling money in China, so, y'know, they're ok with not pushing things too hard.
- Soviet-Japanese 'incidents' start to pop up in 1938, in a more serious way than in reality. Most of the Japanese troops on the mainland are in Manchuria, after all, and they can only cause retarded international incidents in their immediate vicinity...
- 1939 sees a continuation of that process and probably results in pissing off the USSR sufficiently to cause something Serious on the Manchurian border - a Khalkhin Gol on steroids, I guess. After a pretty severe beatdown (which it would be, realistically), Japanese attention shifts to China. For whatever reason, the balloon goes up around Shanghai late in the year. The great preoccupation of the Chinese in the immediate pre-1937 period was building up a sufficiently large competent armed force to prevent Japanese landings on the coast around Shanghai - two years of buildup gives them a much greater ability to do that. So, the Japanese can't go around Shanghai - they have to go straight at it.
- 1940 is mostly occupied blowing apart Shanghai, Nanjing and every bush and berm in between. Japan isn't really prepared for operations on a large scale here - I can imagine their being removed from Shanghai completely for a while - so it takes time to get everything moving in the first place and longer to move beyond a stalemate. That reorganised army the Chinese put together is mostly wrecked, but so is is the Japanese force that's been pushing upriver - as is the primary economic center of China. That's the sort of thing that takes a while to fix...and while all this is going on there's a huge blowup over French Indochina - I'm not sure how exactly the Japanese do that one without getting involved in the wider war, but it's gotta involve a hell of a display.
- Into 1941, you see movement in the North (where offensives had been limted due to paranoia about Soviet intentions after the M-R Pact and, franky, a lack of need - Japanese political control is spreading just fine without a war) after the Germans invade Russia. Rebuilding infrastructure and reorganising troops around the lower Yangtze is liable to take a while - the Japanese want to get something out of China, economically. Easy pickups on the coast are taken by the Navy, but the Army declines to be involved in a big way - their pet project in the North is going just fine - and Hong Kong and Canton are blockaded rather than occupied. The end result's the same - armament imports have to go via Burma or the USSR.
So, that brings us to Dec. 7. By this point things are relatively quiet - the KMT Govt has removed itself to Wuhan and in trying to conserve its strength and keep a lid on a country that thinks far more should be done to actually fight is mostly leaving the Japanese alone - which suits them fine, as they're getting more out of China economically and there's a whole other war to get ready for. A force is probably getting ready to push further up the Yangtze, though there's limited urgency to it.
An initial Japanese plan for Dec. 8 or so in the Pearl River delta might be something like this (except with appropriate new bases):
Occupy Macau, jump into Daya Bay and move north to cut the Canton-HK railway, then march into HK at a leisurely pace. HK is known to be considered a hopeless case by UK, so forces needed are minimal - the trick is being strong enough to cover against any intervention by the Chinese - Guangdong is not happy with the relatively non-belligerent attitude taken by central govt but receipt of arms shipments is dependent on behaving, so forces available will be limited - after which the cover force can go do something useful elsewhere, either in China or not. Control of HK and Macau closes the Pearl to the Chinese - at which point Canton is really fairly irrelevant as it's a port without a sea.
Or just start the Japanese in control of Canton as usual. Like I said, I haven't actually decided what to do with it.