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Consider most of the weapons they were using were fine in China, they needed the expanded resources to continue that action. I guess they figured they could get a bunch of quick victories, get a peace settlement with the Americans and British and then move back to taking China.
Their armor at the start of the war was about as good (or maybe even better) that te Germans (Type 89 and 97 verses Panzer I and II, with early Panzer IIIs, IVs and Panzer 38(t)s?). Though I seriously doubt the Japanese had anywhere never the numbers the Germans had at the start of the war. They certainly could not keep up in production or technology compared to the Germans.
Japanese manufacturing needed to go to aircraft and ship construction in the 40s as that is were most of the war was taking place. If you can keep them form being able to land troops or support said troops, you have basically won. Even if your infantry equipment is not up to standards.
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