In 1939, the United States had renounced its trade treaty with Japan; and, beginning with an aviation gasoline ban in July 1940, Japan became subject to increasing economic pressure. During this time, Japan launched its first attack against Changsha, a strategically important Chinese city, but was repulsed by late September. Despite several offensives by both sides, the war between China and Japan was stalemated by 1940. To increase pressure on China by blocking supply routes, and to better position Japanese forces in the event of a war with the Western powers, Japan invaded and occupied northern Indochina. Afterwards, the United States embargoed iron, steel and mechanical parts against Japan. Other sanctions soon followed. Chinese nationalist forces launched a large-scale counter-offensive in early 1940. In August, Chinese communists launched an offensive in Central China; in retaliation, Japan instituted harsh measures in occupied areas to reduce human and material resources for the communists. Continued antipathy between Chinese communist and nationalist forces culminated in armed clashes in January 1941, effectively ending their co-operation. In March, the Japanese 11th army attacked the headquarters of the Chinese 19th army but was repulsed during Battle of Shanggao. In September, Japan attempted to take the city of Changsha again and clashed with Chinese nationalist forces.

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