The KMT laid a siege to the Japanese area of Shanghai

The Imperial General Headquarters (GHQ) in Tokyo, content with the gains acquired in northern China following the Marco Polo Bridge Incident, initially showed reluctance to escalate the conflict into full-scale war. The KMT, however, determined that the "breaking point" of Japanese aggression had been reached. Chiang Kai-shek quickly mobilized the central government's army and air force, placed them under his direct command, and laid siege to the Japanese area of Shanghai International Settlement, where 30,000 Japanese civilians lived with 30,000 troops on August 12, 1937.