In most scenarios that I have played, there is not enough support for the Chinese units unless they are in a base with at least one HQ. If you have lots of units there, there still may not be enough support. Many of the support squads are also disabled, hence the other squads and devices do not perform effectively and are slower to become undisabled.
So, at least initially, don't let your average Chinese infantry units take squads since the Chinese really don't have enough supply anyway. Rather, let them take support squads and use what support and supply that they do have to activate disabled squads. So save the squads (pulse them in by changing your replacement and stockpile settings if you need to) and use the squads saved to go into the Chinese units that get supply from India. You could also pulse them into units for your final defensive line before Chungking/Changsa to make it even harder to evict those heavily dug in units.
I also like to wait until a Chinese unit gets to 50 experience to take replacements. I know that they can lower the overall experience level but at least they are more effective than going to units with much lower experience. I think that the 50 experience level makes it easier for them to pass certain checks, but I don't know this for sure.
Yes, supply and support are different. Support allows what is there to use the supply effective to do certain tasks - including fighting. But support is also important for other devices to use what supply is there to become active and not stay disabled. So by increasing the total number of squads and keeping the amount of supply the same, there is less supply for each device allowing fewer disabled devices to become active. Inactive devices are just points waiting to be harvested while active ones can generate points for you in combat.
Seek peace but keep your gun handy.
I'm not a complete idiot, some parts are missing!
“Illegitemus non carborundum est (“Don’t let the bastards grind you down”).”
― Julia Child