Axis & Allies Developer and Playtester; War of the Ring Editor and Playtester
This is a glitch in the global political rules. It will be fixed in the FAQ. China should be able to declare war on Italy under those circumstances.
I believe the act of entering Chinese territories causes war with China...even if the Chinese territory is captured by Japan, it is still occupied China, hence a Chinese territory.
No, currently only attacking a Chinese-held territory is prohibited.
If they are not at war, the other way to look at it is this: You can attack the Japanese territory and simply ignore the Italian units in the zone. Just as you ignore ships of a nation you are not at war with when attacking a sea zone.
That only works at sea. On land, attacking a territory containing units belonging to a power with which you're not at war is prohibited.