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So what I am asking is; what if Japan never instigated USA?
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The Japanese offensive would have bogged down and the war would have been an endless war of attrition. Japan's advantages were having armor (though it was crappy armor) and complete control of the seas. This allowed Japan to take the plains and coastal areas. But the deeper they went into China the more problems they had keeping their troops supplied. Chinese partisans were a huge nuisance. When Japan's oil ran out because of the oil embargo (UK, USA, Netherlands) then Japan would have lost its advantage with regard to having armored forces.
China had an overwhelming reserve of mnapower. In a war of attrition, Japan is forced to make peace. At best Japan might be able to create another puppet state in Shanxi. Also keep in mind that the Chinese Communist were NOT using their full armies against Japan. Their strategy was to let the Nationalists do the heavy lifting and once Japan gave up....resume the civil war against the nationalist that had been bled white against the Japanese. The communists were getting their ass kicked by the Nationalists. The Marco Polo Bridge inicident is what saved them. Quite a few historians believe it was the Communists the attacked the Japanese at the Marco Polo bridge to start this war. And I agree with these historians as well. Chiang Kai-Shek and Japan were tricked into making war with each other.
http://en.wikipedia.org/wiki/Marco_Polo_Bridge_Incident
If Japan were smart, they would have attacked the Netherlands/UK instead of the USA. They could have seized the Dutch oil and the Brits would have gotten their asses kicked trying to fight both the German and Japanese Navy. The isolationist USA would NOT have declared war on Japan for doing this.