In a meeting of the Imperial Conference, Japan made a significant shift in its policy toward East Asia. Let's imagine the conference as a sort of a club where Japan's most important decision-makers gathered to decide their country's fate.

You might be wondering what the "China Incident" is - it's another term for the Sino-Japanese War, which started in 1937. Many people in Japan, including some in the army, wanted a peaceful end to this conflict. Unfortunately, the Imperial Way faction, a group of hardcore militarists who wanted to "subjugate China," took control of the situation. Think of this faction as the "bad guys" who were obsessed with dominating China. This shift towards the Imperial Way faction led to the establishment of the New Order.

The New Order had four main demands

• Recognition of Manchukuo: Japan wanted China to officially accept Manchukuo as a separate country (which was essentially a Japanese puppet state in northeastern China).
• Neutral zones: Japan wanted to establish neutral areas in northern China and Inner Mongolia.
• Reparations: Japan wanted China to pay them money for the damages caused by the war.
• Cooperation: Japan wanted China to work together with them in the parts of central China occupied by Japan.

Imagine this as a kind of "give and take" agreement where Japan would stop recognizing Jiang Jieshi's Chinese government unless China agreed to these terms. Jiang Jieshi, by the way, was the leader of the Chinese Nationalists or GMD.