Japanese source: 1,591 killed
The offensive was originally intended to prevent Chinese forces from reinforcing the British Commonwealth forces engaged in Hong Kong. With the capture of Hong Kong on 25 December, however, it was decided to continue the offensive against Changsha in order to maximize the blow against the Chinese government.
The offensive resulted in failure for the Japanese, as Chinese forces were able to lure them into a trap and encircle them. After suffering heavy casualties, Japanese forces were forced to carry out a general retreat.
On 27 December, the Japanese 3rd, 6th, and 40th Divisions massed at Yueyang and advanced southward in three columns and crossed the Xinqiang River, and tried again to cross the Miluo River to reach Changsha. However, the Chinese formed a deep pocket around the city and set up ambush parties around the Luoyang River. Halfway from Miluo River and Changsha, the Japanese columns faced strong resistance from the Chinese and the eastern column was forced to take a detour further east, and the other two columns had to move closer together than originally planned. During the southward advance the Japanese encountered three Chinese army divisions that were pushed aside but not crushed; they retreated into the eastern mountains.
Changsha was evacuated except for the Chinese army and some 160 civilians who wished to stay to help the defense. The defense was also stiffened by a significant number of British-supplied mortars, two batteries of French-supplied 75mm field guns and several 2 pdr anti-tank guns. Also of great importance were eight new U.S.-supplied M2A1 tanks which were deployed within the city itself. These vehicles proved to be of extraordinary value to the defense due to their all-round machine gun fire capability. On 31 December 1941, the Japanese troops attacked the southeastern defenses of the city but failed to make any gains. Subsequently, they attacked the southern and then the eastern parts of the defenses. Meanwhile, the northern part of the city suffered heavy bombardment from Japanese artillery. The Japanese eventually cut through the first line of defense, but were unable to breach the second line of defense near the city center.
On 1 January 1942 the Chinese counter-attack surprised the Japanese with a bombardment using heavy guns, inflicting high casualties on them. At about the same time, the army units that had retreated to the mountains during the Japanese advance swept down to attack the Japanese supply lines with the aid of local guerillas. The Japanese line collapsed on 4 January. The three Japanese divisions were besieged and requested the help of the Japanese 9th Independent Brigade stationed in Yueyang. However, on 9 January this unit faced heavy fighting with the Chinese and was unable to relieve the besieged Japanese divisions.
The besieged Japanese then attempted to retreat across the Luoyang River, not knowing that an ambush party was already stationed in the region. Losing heavily at the river crossing, the Japanese eventually reached the Xinqiang River on 15 January to complete the retreat.
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The third Battle of Changsha can be thought of as decisive. Just a month after Pearl Harbor and U.S. entry into the war, the battle was acclaimed to be the only major Allied victory of the Asia-Pacific theater in late-1941/early-1942. It was seen as a major victory and opened the possibility that the Chinese could turn the tide of the war against Japan. It earned Generalissimo Chiang Kaishek's Government much prestige from abroad and legitimacy in China. Xue Yue earned himself more prestige in China for his three victories and outstanding tactical skills. Changsha would remain in Chinese hands until 1944.