Sorry for the late response and thanks for your comments.
Here are the answers.
1: The setup looks basically free inside that side's area. But, which army set up first ?
The Chinese army setup first since they are the defensive side.
2: The machinegun units can roll twice per attack. But, which is correct ?
If you hit the enemy on the first roll, you don't need to roll it again.
If you miss the first roll, you can roll it again.