@Sumeragi: The Korean's are actually not that far behind at all, its just that it takes a long time to upgrade their units. The Korean Army is fighting with on average 1995 level units, which are still very powerful. Soon, they will start upgrading to 2005 levels.
@Barvinok: No. All major ground forces are being devoted to the land war in Asia. For now, local defensive units in the pacific will have to hold out on their own, and defense of the area will rest primarily with the Japanese Navy and Air Force.
@Asalto: No actually. I guess I should change the country's name to the "Islamic Republic of Arabia" or something along those lines, since rule by the Saudi Royal Family has long been extinguished.
@Nathan Madien: Acceptable losses. I would gladly trade 5 ships for hordes upon hordes of American ones anyday. The US Navy is losing much more ships than Japan is, and will be losing more in the future!
@everyone else: thanks for the comments!
Also, regarding future plans for China, I won't spoil anything, so when it happens, is when you will see what will become of China. However, I can pretty much assure that united China is out of the question. Japan will do what it can to ensure that only Japan, not China, is the sole regional superpower of Asia!
Enemy pressure is beginning to increase in the battle for China. Massive Russian reinforcements are finally arriving to the region and they are starting to attack Japanese lines. Japan cannot afford to fight pitched battles against numerically superior forces, so this Japanese mechanized corps is ordered to withdraw from combat and head to the east.
In India, Japanese and DRI forces are ordered to go once more on the offensive, since it is believed the Indians no longer have much left in their army to fight with. Initially, advances are successful, and Japanese troops make new gains. A battered DRI infantry division is even able to take control of Mumbai, one of India's most important cities. However, the enemy scrapes together its last reserves and counterattacks, retaking Mumbai and soon other major areas. The Japanese/allied advance soon becomes untenable and friendly forces start to withdraw again to preserve their forces.
At sea, Japan takes vengeance for the loss of two precious Aircraft Carriers to the US Navy. Japanese bombers are ordered to launch massive air attacks on the American naval base at Guam, which is too fortified for a ground assault at the moment. The base is found to be full of enemy warships, giving the Japanese Air Force plenty of targets to choose from. However, they are ordered to give priority to any enemy aircraft carriers that are based there, something the Americans do not disappoint with.
Japanese aircraft pound the American base, but also take rather heavy casualties themselves from enemy anti-aircraft fire. Many Japanese strike aircraft and bombers are shot down, but they are able to cause substantial damage. Before attacks are called off, the Japanese air force successfully destroys a cruiser, a destroyer, and most importantly, 3 American aircraft carriers, which are now little more than burning hulks alongside their docks at Guam.
The Americans very soon get revenge however, albeit not on Japan's navy. Without warning, a powerful American carrier task force pounds its way through the Straits of Malacca. The Americans run headlong into a patrolling fleet of the Royal Thai Navy. The Thai forces stand no chance, being far out of their league in this fight. American carrier aircraft and anti-ship missiles succeed in sinking 4 Thai ships, as well as heavily damaging the rest. Thailand's navy is now out of the fight, just like Korea's navy. The Japanese navy is now almost all alone in the pacific ocean.
More bad news, this time from Mongolia. Advances on the Mongol capital are blunted by new enemy reinforcements. The enemy then goes on the offensive, forcing Japanese led units to flee the southeastern part of the country.
Worse news then comes from Yan'an, a critical defensive position along the northern regions of the front. Massive combined SCO forces hammer the Japanese 2nd Army that is stationed there, forcing its units to flee the region across the river to the east. The Russians are really putting on the pressure now, and suddenly Japan's entire northern portion of the Chinese front is looking more and more unstable.
In the south, at Borneo, the Coalition has begun new ground offensives against Japan. American forces land in Balikpapan, Borneo, with the objective of seizing the entire resource filled island from Japanese control. There are no garrisons on the island to stop them, so Japan begins sending ships and aircraft to try and control the enemy landings.
On the way there, Japanese nuclear battlecruisers trash a small Chinese fleet. The Chinese ships are easy prey, and do not survive this engagement.
More enemy pressure in Asia. This time, the Russians have finally begun to cross the Northern Limit Line to take control of Manchukuo's northern border regions. Korean units stationed there try to hold their ground, but they are forced to withdraw from combat.
In Borneo, Japanese fighter aircraft are pounding away at the American formations. With anti-tank missiles, satellite and laser guided bombs, and various other ground attack weaponry, Japanese aircraft are causing huge casualties to the American forces. It is hoped that this will stall the American advance long enough to allow some limited ground forces from the Philippines to arrive and secure the area.
Back in the straits of Malacca, heavily damaged and exhausted Thai warships are ambushed by a very large SCO expeditionary fleet, consisting of European SCO ships from Romania, Turkey, Greece, and Serbia. The Thai navy takes huge losses, and retreats from the battle, with its few remaining ships limping back into port, barely able to float.
Near Borneo, yet another major setback at sea for Japan. The Japanese nuclear battlecruiser strike group is ambushed by an American aircraft carrier battlegroup, which pounces on the Japanese capital ships and their escorts. The Americans give the majority of their attention to the fleet's two light aircraft carriers, the
Hyuga and the
Tama. In a hail of bombs and anti-ship missiles, the Japanese CVL's are struck down by the Americans, sinking beneath the waves taking most of their crew members with them. The rest of the Japanese ships quickly disengage from combat and flee to minor ports along the Borneo cost.
Japan seeks revenge against the Americans for this loss. Japan's first carrier task force, rotated in to the waters off Guam, soon intercepts the same American fleet as it returns to base for supplies and repairs. The Japanese and American warships hammer each other with missiles, bombs, and torpedoes in a gigantic naval battle.
The Americans soon withdraw, losing 2 cruisers and 2 missile submarines at Japanese hands. However, they do not leave without inflicting casualties. Several Japanese vessels are damaged, but most importantly, the veteran nuclear Aircraft Carrier, the
Shokaku, is lost. These recent losses to the Americans are causing alot of worry to Japanese admirals and leaders back home. Japan cannot afford to take too many naval losses, and yet Japan is starting to lose very precious capital warships. Unless Japan can win a series of very decisive battles with the Americans and their allies which result in lots of their ships being sunk for little Japanese casualties, Japan's mighty navy could be worn down by sheer attrition. The Americans still have lots of ships, and most importantly carriers left in their arsenal, and until those ships are sunk, total pacific ocean victory will be out of Japan's grasp.