Do you think a single 1 battalion division per province feels like a substantial manpower and equipment investment though?
No, but that's why I said this:
Instead of Communist support flipping states, a certain amount of partisan activity flips the state out of Japanese control. Then you re-scale partisan activity so that the heavily populated stated require substantial garrisons (more than now). You could even give China a national spirit to boost partisan strength.
And then you remove the "CAV has double suppression" mechanic so that Japan really has to invest in putting troops in states to prevent flipping. Then I'd also fix the partisan suppression mechanics so that understrength divisions with low XP and 20% of their equipment quota do not receive full benefit of their suppression values.
One battalion wouldn't be enough. And I know manpower isn't the problem for Japan; equipment is. The goal would be to tie down units in the rear that use equipment.
That's why I'm so adamant about the whole "suppression needs to be affected by equipment" thing in this proposal. If you can spit out units with 20% of their equipment and no training and suppress Chinese partisans, then changing it won't matter. But if the states flip control when not suppressed properly, and if Chinese partisans get a national spirit buff, and Japan actually has to put divisions with full equipment quotas in regions to prevent them from flipping, Japan will not be able to bring her full strength to bear (or will have to make more equipment) to defeat China.
That won't solve the "China is pacified by peace conference" problem, but it's a start.