A Cabinet under Prince Konoye had held office throughout the first
phase of the war in China. It resigned in January 1939, when China’s
refusal to accept a dictated peace had become unmistakable. For Japan
now no longer won spectacular victories. A stalemate had developed,
and the war had become a war of attrition. This second phase of the
war lasted for another eighteen months--until June 1940, when Hitler’s
victories in Europe shifted the balance of power in the Far East.
The costs to Japan of this second period were no less than before. She
had to maintain the same number of troops in China, totaling 800,000
or 1,000,000. Heavy fighting was taking place almost continuously.
But the hostilities, ranging from Canton to Inner Mongolia, led to no
decisive results. In some cases Japan occupied new cities, such as
Nanchang, Nanning and Ichang. In other cases Japanese offensives were
disastrously routed. Chinese guerrillas, ranging far and wide, limited
Japan’s area of effective control, even in the so-called “occupied”
territory. Moreover, the economic gains were not as great as the army
had expected. Sales of Japanese goods to China steadily increased, but
imports of Chinese raw materials either declined or rose very slowly.