I have done the following three times. I start by encircling everything north of Yucheng - Anyang - Changzhi. If you concentrate your forces to the north, it is an easy objective because China needs a lot of divisions to cover their coastal provinces. I do not know if it makes a difference to the AI, but I keep a lot of divisions in southern Manchukuo before the war. This is under the assumption that China will not notice them when they are not directly bordering one of their provinces, so they will not put a lot of divisions to the north. Thus, you should heavily outnumber them to the north when war breaks out. Do not forget about the TACs, they can destroy quite a few divisions by themselves over the course of the campaign. The trick is to move as quickly as possible downwards from the west and east at the same time but do not attack the center. Ideally take Yucheng amphibiously to trap more divisions, but you should still be able to encircle a few divisions otherwise. In general, use all your garrisons offensively when you do not need them to reduce TC. By that, I mean that garrisons can easily hold Yucheng, since it is behind a river. Thus, you releave your mobile units to stretch the spearhead further. I actually built several garrisons before the war. They are cheaper to produce and can help to hold the line. I also built a small number of ART. It is true that the infantry moves slower that way, but you can deploy INF-ART near coastal provinces only and move them by sea once in a while. Then they will always see action, and it will give them a bit of extra punch.
When you have taken the north, the river is fairly easy to defend and China will have moved a lot of units up to keep you from crossing the river. If you have time, take Xi'an, but do not move further than that, you just need a bridgehead across the river for later. If the river is too heavily defended, stay behind the river. Hold the river with a few garrisons and infantry and send at least half of your units to take Nanjing amphibiously. Now that the bulk of the chinese are in the north, you will hopefully not be bogged down in Nanjing. When you reach Nanjing, analyze the situation. If you are not overwhelmed, you can attempt to link up Xi'an and Nanjing and encircle everything towards the coast. If it seems hard, start by making some smaller encirclements to gain local superiority. If it fails, just move your focus somewhere else; leave a token defence in Nanjing and instead amphibiously assault towards the south. Once you accomplish a major encirclement, you should focus on taking Chongqing. If you can occupy Chongqing, the north and the Nanjing area, the chinese TC will be driven so low (due to low IC) that you should be able to win against larger numbers.