Things seemed to be on a reasonable track to having issues resoled without armed clashes between the two Asian Powers. However in 1936 the Empire of the Rising Sun had granted its part of China known as the Han Protectorate self rule. In 1938 the Imperial Government allowed the rasing of what was refereed to as the Han Army. The troops were equipped with Japanese weapons including small arms, Machine guns, Artillery and older tanks which were considered obsolete by the Imperial Army. The army was set at 3 Infantry divisions, 1 cavalry division and 1 tank division. In 1940 the army was expanded to 6 Infantry divisions, 2 cavalry and 1 armored Brigade.
When the Imperial Government turned over the Chinese territories bordering Mongolia to the Republic of China the Protectorate Prime Minister protested to Tokyo. It also Increased the size of the Han Army with the aid of sympathetic Generals in the Imperial forces so that by 1943 it had 12 Infantry divisions, 4 Cavalry divisions 4 armored Brigades,5 air defense Battalions and 2 independent artillery regiments. The Han Army was loyal to the Han Government and the Empire of the Rising Sun.