I'd say if China fights more effectively in 1931 war, it could get the approval of Nazi Germany and becoming a main military partner (well it did in OTL but I'm talking big, like tanks and planes, not just Stahlhelms and subs), would get access to modern weapons. Then the Japanese attack China like in OTL in 1937.
The Chinese however, stop them around Beijing or so (maybe between Beijing and Shanghai), whilst causing problems for Japanese ships with U-Boats. Slowing the invasion near Beijing, however, could lead to a Beijing Massacre and not a Nanjing one. If this happens (meaning the invasion was stopped as far north as possible), then China may either:
i) Sue for peace, while they can. However, this TL calls for a Chinese victory.
ii) Fight the Japanese.
The KMT takes option 2 and seeks more German/Soviet help. The Germans place their bet on China completely by this time (1939), and with the Molotov pact, are able to "easily" send materials over to China via USSR. USSR, on the other hand, thinks that Japan still has a fair chance at winning so they give China weapons.
Also, this TL will be made more possible if Mao Zedong dies or comes to terms with the KMT. For the sake of violence (and to make sure Mao never comes up again), I'll say that the Japanese, in a daring but doomed campaign, strike at wherever it was Mao ended up after the Long March, fight Mao and his comrades, and crush the CCP leadership before being themselves wiped out by the KMT troops. With no more CCP, the KMT can even more easily get ahold of the situation.
In mid-1940, China has taken Beijing and pretty much everything it had in 1937. During the last 3 years China has set up weapons facilities, so it can manufactre its own equipment now to some degree. The Japanese, knowing there can be no taking over China, try to keep Manchuko. But the ROC demands that in inheriting the territory of the Qing, it must have Manchuria, and does not make a truce with Japan.
The USSR, seeing that Japan is losing, stops giving stuff to the KMT, though German arms are still coming into China in small amounts (since the war happened in Europe). But by this time China has already gained the strategic advantage, and more industries to support the war effort are being created. After heavy fighting and millions of military and civilian deaths, the major part of Manchuria is taken by the middle of 1942.
There are no more supplies coming from Germany at all anymore due to the war with the USSR.
By 1943, Chinese armies are in the process of capturing what is left of Seoul, where intially greeted as liberators, are now seen as warfare agitators. In Feburary, they have gotten far past Seoul (almost to Pusan) and the Japanese try an amphibious landing at Inchon. It traps some of the Chinese spearheads, but reeinforcments arrive from the north and finally in April 1944 the Japanese are crushed and the remnants surrender as Chinese troops enter Pusan.
The Chinese Kill/Death ratio, though, is a hefty 3:1, and people are tired of the warfare. The Japanese had a naval blockade going for the last seven years, and the effects are wearing down on the Chinese populace.
At the Treaty of Shanghai, Japan cedes all of Korea, but keeps Taiwan. It is, however, made to pay a large sum of reparations for the damage done. Japan accepts these unfavourable terms, for even though it currently has a large naval advantage, the Japanese leaders see that there is no hope for taking over Asia and that if they continue the war, it would just end in China developing air superiority (since they are already building a superior industrial base) and destroying the Japanese Navy.
At WW2's end, China arises as a major victor along with the Soviet Union, and a Cold War gradually starts to develop between the two nations. Korea becomes a puppet of China, and Japan's military leadership is eventually ousted because they manage the economy badly. The new leadership is more liberal, and sides with China in the Sino-Soviet Cold War, though it does do trade with the USSR. The USA has good relations with Japan and China, but as it did not enter WW2 until 1945 (The Soviet Union was gaining on Berlin by the end of '45 and the USA decided to liberate France), did not get a strong NATO alliance in Europe. The USSR is even more unstable than in OTL since it has to hold onto all of Germany and Italy, and the USA and UK make an anti-Soviet bloc centered in the former colonies.
The result is that, by the end of the 50's the Cold War has centered istelf on the Middle East (Israel and Oil). Nuclear weapons are first obtained by the USA in 1950, then the USSR in 1956, and finally China and Japan explode a nuke in Xinjiang in 1964. The USSR has the most adavnced rocket technology, and sends a man to the moon in 1970. The Cold War is still mainly fought bewteen the USA and USSR, with China and its Asian allies as "neutrals" somewhat at odds with the USSR. This encourages the USA to attempt to turn China into a client state by giving it economic favours but this is only somewhat sucessful. China develops a strong Asian alliance with Japan and the former colonies in SE Asia.
So in 1985 we have:
1st World: USA, UK, France, most of Africa, India, Australia, and most of South America. Client States in Middle East.
notes: Africa and South Amrica have some states that are either Soviet-alligned or neutral.
2nd World: USSR, Eastern Europe, Germany, Italy. Client states in S. America, Africa, and the Middle East.
Notes: Germany has been re-armed and shares a heavily-guarded border with France.
3rd World: China, Japan, Korea, SE Asia.
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Holy crap, did I just inadventently make the 1984-world?