During the Second World War, Axis China launched an offensive into Burma in order to support the Burmese nationalist movement led by Ba Maw against the British colonialists. The Chinese offensive was initially successful, but the NRA was pushed back after losing the Battle of Mandalay in January 1943.

With Japan a US ally, the United States' hands were free to focus on the European theatre, but Nazi Germany only surrendered after Cologne was nuked in July 1945. The partition of Germany still happened, and the USSR carved out East Turkestan as a satellite state while its puppet Outer Mongolia annexed parts of Inner Mongolia.

Manchukuo and Mengjiang were established as Japanese puppet states under the control of the IJA. Despite never becoming fascist, Japan treated these two states like colonies, stationing troops in them to deter any resistance movements and controlling their economies.

After the Chinese defeat in WWII, Dai Li's regime lost all remaining credibility and he was overthrown by a coup d'état on 24 August 1945. The following day, the Republic of China merged with the Wang Jingwei regime, making Wang the leader of all of China proper.

As China's leader, Wang aligned his country with the United States and Japan against the Soviet Union, but continued his predecessor's policies of corporatism and industrialization. By 1950, China had recovered from three decades of war, entering a period of prosperity.

The following year, a communist independence revolt broke out in Korea, followed by ones in Manchukuo and Mengjiang.