Building Militia as a quick way to throw units into the front is a good idea and it works, kind of. It takes about 6 weeks to build militia, which i feel is too long. Militia should be built earlier and far cheaper.
Chinese Militia were sadly armed with antiquated rifles...and i mean some of em had muskets mind you. Other Units, and alot of them, had their Grandfathers swords and Halberds. Most of these were Irregulars that just kinda rose up against the Japanese. Many were drafted or conscripted as the Chinese Armies retreated.
Currently, Militia in its current form is best used only in Mountain areas and should at least be stacked with a couple of Regular Units to give it more staying power. Militia should also be added to Regular Formations to give it more 'Attritional' Value. But Sadly, the Nat Chinese Army is purely Defensive and usually is unable to recapture Occupied Territory. A good example was a recent game i played where i Invaded a Province of 8 Divisions, 3 of which were Manchurian....with 29 Divisions (i think it was 30... but i cant remember) and i lost....... in open terrain with no forts........
I cannot think of any other way to play China other than to join the allies on Jan 1 1936 (in the '36 scenario). You get Techs, and in games with more experienced players, British and French troops. It also makes it more difficult for Japan to DOW.
The other way is to join the Commies, but that ends up in a boring game with China as if Japan doesnt DOW you...you kind of end up...sitting on your ass the whole game...as it will take forever to march your troops to Moskva to defend the communist heartland.
For exploits...I say the best way is to take allow the allies to give u military control of their units. Dont move them...but become something like a Manpower, Refit Country....refit your allied troops with Chinese manpower and supplies....it works......