Difficult question- Please don't move

That just clarifies the fact that China has no capital, and so it never has to give over its stash of IPC to Japan. Unlike India or ANZAC who if they lose their capital to Japan must give Japan all of their stored up IPC. Japan still gets IPC for captured Chines territories during Japans collect income phase.

also, when it says you can place units on any chinese territory, thats only ones that you controlled at the start of your turn.

I think China can place units on any territory it controls during the place units phase. Even ones it just took control of.

Pretty sure China can place unlimited units too, so once the threat to the mainland is neutralized, China should save all their money so they can drop a huge army where needed when/if the axis ever return to the continent.

@JimmyHat:

Pretty sure China can place unlimited units too, so once the threat to the mainland is neutralized, China should save all their money so they can drop a huge army where needed when/if the axis ever return to the continent.

That’s an interesting idea.  Never thought of China simply saving their money.  When the Allies are doing good in our games, China simply keeps buying men and some artillery and placing them all along the coast to make it hard for Japan to get back onto the mainland. 
In one game, things went very badly for Japan.  They lost all their outside possessions and their fleet and were just turtling on Japan.  Meanwhile, Germany was doing very well and managed to sack Moscow while the Italians actually took Stalingrad.  China had all it’s men and equipment in the coastal territories and along came some German and Italian tanks from Russia taking several of the Inner Chinese territories without a fight.  On China’s next turn, they did place some blocking infantry in front of the Axis tanks, but they had a heck of a time moving the bulk of their forces back west to really deal with them.

Every territory Japan takes from China or already has in possession, the Japanese get the IPC’s for that territory added to the IPC base. Likewise, if China takes territory back from the Japanese, then China adds those territory IPC value to it’s base, for possible purchase during the next Purchase Units phase. Or, as JimmyHat has pointed out, they can save their IPC’s like any country can, for purchase during a subsequent Purchase Units phase. The Chinese can build in any territory they owned at the beginning of their turn OR any territory they just reclaimed(this is specific to China only. All other countries must own the territory at the beginning or their Purchase Units phase to build in it that turn). But, it must be a Chinese controlled hex in order for the Chinese to build there. China can’t build in a Japanese controlled territory.

Page 9 in the Pacific 1940 Rulebook does the job for me