The Nationalist Chinese are unfortunately very difficult to make an effective army with. They have almost no anti-tank capability, low overall firepower, and are very fragile. There’s little point of playing a game against late war armies, as a Tiger or similar heavy tank can simply wade through most of your units. Simply put a competitive Chinese army is nearly impossible to achieve.
For casual play your best bet is to try for an early war game (the closer to ’39 the better). The standard meeting engagement is best, though the Chinese actually can make a decent defence in an assault scenario.
When constructing your Chinese army keep a few things in mind. The T-26 Series 1933 is your only hope against enemy armour. If you’re going to build a serious Chinese army then you’re going to need a lot of these, especially if you have to take down a high defence tank. They are extremely fragile, having not only defence 2/2 but being unreliable as well, so be very aware of each hex you considering moving them to. You don’t want to end up permanently disrupted where you can no longer affect the battle. Keep the behind cover whenever possible, until you absolutely have to expose them. While they are practically vulnerable to everything, aircraft are especially dangerous to the T-26.
The Kuomintang Machine-Gun Team is your anti-infantry/light vehicle support. Enough of these can lay down a hail of withering fire to support your army. Use your attacks to disrupt as much of the enemy as possible, and then use extra attacks to destroy them rather than concentrating fire on one at a time; this will allow your other units to move in with less effective fire against them on the following turn. Whenever possible open up the way for your T-26s to move in. The MG also serves as your only significant AA. Keep your tanks covered, though you can’t stop aircraft from attacking them.
The Kuomintang Riflemen, like the T-26, are best kept behind cover whenever possible. They are somewhat ineffectual at medium range, but with MG supporting fire they can hopefully move into closer ranges. Your MGs will likely be a higher priority than the Riflemen at first, so use this to your advantage. Remember cover won’t save them, and defencive fire will immediately kill them.
Lastly is the Kuomintang Officer. My best advice is not to waste the points on him. +1 Initiative won’t make enough of a difference to matter; he has next to no combat value, and doesn’t even have a command ability. There’s no reason to take him over 2-3 Riflemen or an MG.
Somewhat like the Japanese, the Nationalist Chinese depend on a map with a good amount of terrain on it to cover their movement. Most of your units are unlikely to survive an attack, nor is your army particularly mobile. About the only time I would want to play with the Chinese is in a 1939 game against Japan, and even then it would be difficult. The best strategy would be to keep advancing under cover where you can, giving preference to the T-26’s and riflemen that can die/become useless with a single hit. Position MGs with a good field of fire, and try to either flank around with your tanks, or keep them positioned to move in and counter attack. The Riflemen, and possibly an MG or two, are best used to take the objective and hide behind the terrain.
Though it’s more rares (T26) than I’d like, I think this would be the most effective legal army for the Nationalist Chinese:
6x T-26 series 1933
4x Kuomintang Machine-Gun Team
5x Kuomintang Riflemen
If you’re going to relax the unit limit and/or simply don’t have that number of T-26s remove a few, replacing them with MGs and Riflemen.