In 1937, Japan had full control over Manchuria and was planning to conquer China. The Chinese suspended their civil war and formed an alliance to fight against the Japanese after the Marco Polo Bridge Incident. The Chinese troop received help from Soviet Union. Japanese were victorious in Shanghai, Nanjing and Wuhan but the Panay Incident was strongly condemned, especially by the United States. Japanese forces were stopped from spreading to the North by combined forces of Soviet and Mongolian forces. Japanese forces blocked Chinese connection to the outside world and then formed an alliance with Germany and Italy, to form the ‘Axis Powers. To stop Japanese, western powers: Australia, US, Britain, and Dutch stopped selling iron ore, steel and oil to Japan. Japan wanted to fight back but knew that the US had a very strong in economy and military, so they planned to make a peace treaty with the US after some initial victories. (Sivers, Desnoyers and Stow 2012)
