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Is it limited only to Reserve units? I researched 36' Infantry which should give me "Shi 36" as the infantry model but i'm still only able to build reserves.
Yes, this is WAD. Until CHI gets the Full Mobilization Event (probablly at war with JAP) it can't research the Land Doctrine Infantry Division and thus can't build INF units. This represents the extremely limited heavy weapons manufacturing capability in China. Once they are at war it is assumed that they would be able to buy more heavy weapons from foreign suppliers.