I see no reason for Japan to not fight on. TBH if the AI were a little better this situation would not even arise very often. The Chinese should not be able to drive them from the continent. However, not only is it currently easy to do so, it is also easy to follow up with an almost immediate invasion of the Japanese islands and take the whole thing.
"I see no reason for Japan to not fight on."
Even if there was no reason for Japan to not fight on in real life, it doesn't matter, as this is a game, discussing these kinds of things is, frankly, completely pointless.
But if you really wanted to get into it, with historical focuses turned off there could be a 50% chance of Japan agreeing to peace you out, and 50% chance of them not doing that. And with historical focuses turned on they would always continue fighting on.
"TBH if the AI were a little better this situation would not even arise very often."
There are people doing world conquests with Albania and Luxembourg. Try to stop them from winning against Japan as China. Seeing how Paradox has to give the AI cheats, and nerfs to you the player, to make the AI even competent at all, tells me that your imaginary amazing HoI4 AI... isn't going to get implemented. At all. So, it's completely useless to even think "WHAT IF AI GOOD!?!?!?!?!?!?!?!?! THEN NO PROBLEM?!?!?!?!?!?!?!?!?!?!?!"
And in AI vs AI situations (AI China vs AI Japan), your better AI would work both ways, remember that. So, this situation could actually arise maybe even very often.
"The Chinese should not be able to drive them from the continent."
Not in real life maybe, but in the player's hands, in a *game*, yes, they should. It's not like HoI4 is a 100% authentic ww2 simulator.
"However, not only is it currently easy to do so, it is also easy to follow up with an almost immediate invasion of the Japanese islands and take the whole thing."
Yes, it's easy. But do some people want to do that? No. I'd rather just take the mainland provinces and not even worry about Japan, because why should I? If I wanted to roleplay a semi-peaceful, democratic China, surely the Chinese wouldn't be all like "YEAH LET'S GO CAPTURE JAPAN HELL YEAH NATIONALISM F YEAH", right? And it's not like the Chinese would want to do that anyway, seeing as how they are, you know, like... in a middle of a civil war, or something. Go figure.
It's not about real life history here. If it would only be about real life history, then HoI4 might as well be a movie. Why make any decisions when the game will make them for you?
Also, how does it hurt you in any way that people want an event that has two options: Make a fair peace deal with Japan, ending the Sino-Japanese War, or continue fighting Japan, until they capitulate.
How does it hurt you? You could still do your tedious naval invasions to capitulate Japan, while others could, you know, *not do tedious naval invasions, and actually have a time of their life playing this game, instead of it being more like a tedious task that you'd rather not do*.
I'm genuinely curious. Why should you be able to dictate how others who have bought this game with their own money want to play this game? Instead of everyone going the way you want them to go, why not give them actual options to do as they wish?