With the coming of the monsoon season in India operations shifted to the China area of operations. B-25's bombed various targets at Hankow on the 1st, 2nd and 16th. Other targets hit during the month were the airfield at Nanchang on the 3rd; Tien Ho airfield on the 4th and 18th; Canton on the 6th; Japanese Headquarters at Teng Chung on the 8th; Linchwan on the 18th and Chinkiang on the 20th.

    Japanese raids against the airfields at Hengyang and Kweilin resulted in little damage as the attacks were turned back and broken up by P-40's. On July 30th the Japanese attacked the airfield at Hengyang with approximately 120 aircraft. The raids lasted about 36 hours and resulted in the loss of 17 Japanese aircraft against 3 US aircraft.

    On July 4th the China Air Task Force (CATF) was activated under the command of Brigadier General Clare L. Chennault. The CATF was the successor to the famed "Flying Tigers" who had attained 300 confirmed victories against the Japanese at a cost of 50 aircraft and only 9 pilots. At its inception the following combat units were assigned to the CATF:

HQ 23d Fighter Group at Kunming with Colonel Robert L Scott, Jr. in command and 74th and 76th Fighter Squadrons at Kunming with P-40s and 75th Fighter Squadron at Hengyang with P-40s.

16th Fighter Squadron, 51st Fighter Group attached to 23d Fighter Group, at Kunming with P-40s.

11th Bombardment Squadron (Heavy), 7th Bombardment Group (Heavy), at Kunming and a detachment at Kweilin, Hengyang and Nanning with B-25s; Colonel Caleb V Haynes in command.

Later in the month the 76th Fighter Squadron moved from Kunming to Kweilin

In India the India China Ferrying Command was activated on the 15th replacing the Assam-Burma-China Command; the 22nd Bomb Squadron (H) of the 7th Bomb Group (H), and 9th Photo Reconnaissance Squadron arrived at Karachi on the 22nd and 23rd respectively.