From: Vancouver, Washington
Of course, the Chinese were in deep logistic trouble. And neither the Nationalists nor the Communists nor any of the various warlords were totally "Gung-ho" to wasting their strength trying to kill Japanese once the Western Allies were so engaged (in killing Japanese.
To me the game has no problem with presenting the Allied Player with insurmountable problems as far as launching a strategic offensive in China.
But it does seem to me that, IRL, the Japanese did not have the option to launch a strategic offensive either and I have seen nothing to contradict that in my research to date. The limited offensive actions of the Japanese Army after Pearl Harbor resulted in no significant gain of territory by the Japanese even if the Chinese, principally civilians, suffered serious losses.
That is true up until the ICHI-GO Offensive in April 1944. At that point the Japanese did launch a strategic offensive. From what I've read about it though the ICHI-GO Offensive required extensive logistic preparation and support: it involved the transfer of substantial forces from Manchuria, North China, and the Home Islands and consumed more supply than was provided to the Japanese forces battling the Americans in the Pacific.
Admittedly limited to what I can find on the internet my readings about the Strategic Plans of the Japanese in WW2 lead to something along the following as a hypothesis:
1) Japanese Army says "We can take China. Then all the needs of the Empire will be taken care of and we needn't worry much about the rest of the world".
2) 1941 - Japanese Navy says "A fine mess you've gotten us into, Army. Tell you what. Right now all the world is focused on Europe. The Brits and the Dutch have what we need and can't defend it. Only problem is the US but we can take them too, for a year or so. If we take the Brits and Dutch then all the needs of the Empire will be taken of, and you've got a year to arrange some kind of peace thing with the Americans so that we needn't worry much about the rest of the world".
3) 1944 - Japanese Army says, "Well, we tried it your way. It didn't work. You've pretty much lost control of the situation and the Americans are only getting stronger while you and we get weaker. Maybe if you guys (the Navy) can just sort of hold off the Americans, we, the Army, can knock the Chinese out of the war and then we can all make some kind of peace with the Americans.
4) 1945 - Chinese say "Close, but no cigar". Americans say "Burn baby burn". Soviets say "Su-prise su-prise, su-prise". Hirohito says "Uncle"