I guess whether you can call the invasion in 1945 a skirmish is debatable.
Not really: the Japanese Manchuria Army got decisively beaten - and doing that to an entire army isn't a skirmish, it's an example of full-scale war (as soon as the Red Army was able to, i.e. after the defeat of Nazi Germany; given this, the Pacific war-option may very well have been Japan's best bet - even if that didn't pay off either.)
My Suggestions for Improvements:
1) Add Communist China under Mao Zedong as an ally of the Soviet Union and give them a few cities in the western-central China. To make this possible, I'd probably remove the Free French.
They Chinese Communists controlled only one limited area (Yehan) during WW II; their main contribution to the war effort was not fighting the Nationalists until they had gathered enough strength (and support) in 1949 - three years after WW II ended. That being said, it might still be worth while to replace the Free French with the CCP, as they were mainly active in the African-European war theatre.
2) I know this may not be very realistic, but I was thinking to give some anti-tank capability to the Nationalist Chinese so they can resist a Japanese invasion.
The Japanese army never had any medium or heavy tanks during their WW II campaigns, so the Chinese should be able to resist (and even retake some territory from ) the Japanese as is - with the Allies providing support in equipment.
Otherwise, I quite agree.

I have seen that behavior before, usually when there is some error in the WBS file. I am able to run it without that error, though, even with the new version. That's maybe one thing to check: are you running the latest version or at least the one before that? If not you may need to install the patch first. Just in case you don't know already, just go to "check for updates" in the main menu, I think under "advanced." I hope it's something that simple... unfortunately it rarely is. 

