One problem with your question here is that it presumes a certain level of rationality and consistency with regard to creating and fomenting nationalist discourse, when in reality racializing systems are much more affective than rational. Many philosophers and theorists have discussed this very abstractly, but if you want a more contemporaneous and Japanese-focused answer, I'd consider checking out Tosaka Jun's The Japanese Ideology.

Generally speaking, there are a couple things to consider. The first is the era's widely circulating imaginary of China as a civilization in decline. This was in part owing to the west's, and especially Britain's, ability to overrun China (via the Opium wars) and set up treaty ports around China. The imaginary of the nation in decline was wholly related to ideas of modernity (which was a really powerful discourse in global early-20th c. liberalism), from which China was by its nature excluded. In modernization theory, "civilization" is conceptualized as a singular continuum upon which every nation falls. China was imagined to be very far back on this continuum, and thus, their colonization was necessitated. (It is worth noting here that this was the same logic used to justify European colonialism, and that's not mere happenstance.) This kind of discourse grants primacy to the future, rather than the past, so in a sense, a shared cultural history is immaterial.

This aspect segues into the second point, which is the specific manifestation of Japanese colonialism--what Japan termed the "Greater East Asian Co-prosperity Sphere". Japan used its ability to ward of treaty ports, as well as its victories in the First Sino-Japanese and Russo-Japanese wars to justify its colonization of Asia. The argument was, in short, “someone’s going to colonize you, and if the white man does it, they’re going to be brutal. We Japanese, as Asians, know what Asia really needs and can protect you from the evil powers of Europe and the US”. Japan sought to excuse its own brutality by presuming the brutality of western powers would be worse.

The co-prosperity sphere in turn evinces the weird kind of flexibility with regards to racism and nationalism that Japan leveraged during colonization. As I said before, racist discourse is always fundamentally irrational, but Japan was put in a position wherein it was particularly untenable. On the one hand, Japan had been hamstrung globally by anti-Asian discourse and had to resist it on the global scale, but on the same time was trying to leverage it to justify colonization.

Tessa Morris-Suzuki’s book Re-inventing Japan: Time, Space, Nation is a really great resource for an in-depth and nuanced approach to the changing categories of race, ethnicity, etc. One thing she points to is that wartime philosphers and politicians more frequently used the term minzoku 民族, rather than jinshu 人種.The latter is a more scientific “race”, while the former (minzoku) is usually translated as “ethnicity", and is a term that is much more flexible and ergo capacious. It is very much tied to the notion of the nation-state, which means it could swell to include colonized subjects as necessary, and then shrink again to encompass only mainland Japanese.

To sum up, your question is one for which a straight answer is not possible for a number of intertwined reasons. The first is that Japanese state policy, like any state policy, is not univocal and consistent, but the product of a number of people and interest groups that are often at odds. The second is that the global zeitgeist was that the act of colonization contained in itself its own justification. (Social Darwinism was, at the time, a popular theory.) Lastly, racist discourse is not one that is founded upon reason, but upon affect and popular sentiment. I think the latter point is really important to remember, not just in this instance, but more broadly.

Sources:

Tosaka, Jun, Ken C. Kawashima, Fabian Schäfer, and Robert Stolz. Tosaka Jun: A Critical Reader, 2013

Morris-Suzuki, Tessa. Re-inventing Japan: Time, Space, Nation, 1998

Goto-Jones, Christopher. Modern Japan : A Very Short Introduction, Oxford University Press, 2009.

Duus, Peter. Japanese Wartime Empire, 1931-1945. Princeton Univ Pr, 2009.