When the Western-led Versailles conference made its decision on the so-called "Shandong Question" in favor of Japan, Chinese nationalists were both outraged and stunned. The little territory, which ended up having very little significance economically or militarily for either China or Japan during the World War, would end up spawning a chain of events extremely important for the course of Chinese nationalism, identity, and politics. The resulting student protests in Beijing, and then slaughter of protesting students by Warlord order, would push young Chinese nationalist intellectuals very far into the corner of anti-imperialist leftism that had yet to see much traction. Indeed Mao himself, present during the Tiananmen Square protests against the Treaty of Versailles, later recalled his experiences being fired upon by Warlord troops, remarking the now famous quote that "political power grows from the barrel of a gun." Since you ask a few questions, I'll try to answer them all as best as possible.

Background

Even before the fall of the Qing in 1912, anti-imperial sentiment was nothing new to Chinese intellectuals. Various Chinese intellectuals, such as Chen Duxiu, recognized the commonalities shared between nations/ethnic groups such as the Poles, Indians, Jews, and Chinese, and their struggle against different, yet similar, situations of imperialism. The issue was that these Chinese nationalists lacked a universally accepted method of combating such imperialism. The first test against a major imperialist threat in the new post-Qing republic came in 1915, with the Twenty-One Demands sent by Japan to president and warlord Yuan Shikai. A troubling situation made worse by the lack of unity in government, Yuan submitted to most of the demands easily, which sparked boycotts against Japanese made products across China mainly from students in urban east China. It was the first real locally organized defense against imperialism in the Chinese Republic, and it was met with very little success in the long run (the demands ended up hurting Japan more diplomatically, as both the UK and US were annoyed at Japan for being so brazenly aggressive).

Militarily, WW1's onset in 1914 did not initially drag China into the conflict. Yuan, more worried about assassination potential enemies and plotting a rise to emperorship, stayed out of the international squabble, and turned a blind eye to the Japanese occupation of Shandong in 1915 which occurred simultaneous to the Twenty-One Demands. The issue was further complicated that same year as China fell into civil war. Yuan's attempts to crown himself as a monarch were met with resistance in the south from a Yunnan-led coalition naming itself the "Constitutional Defense Army." Making matters even more confusing, just a few months after Yuan's defeat (he remained sitting president), he died leaving the country in shaky hands. Dozens of warlords then vied for control over the Beijing government, resulting in the attempted Manchu Restoration by Zhang Xun, and then another civil war that some historians have coined the North-South War of 1917, which saw the rise of Duan Qirui and Wu Peifu as the most powerful warlord in northern China competing for power (Anhui and Zhili Cliques). So China finally ended up entering WW1 in the later part of 1917 under the leadership of Duan as PM of the Republic, three years already into Japan's occupation of Qingdao.

Duan joining with the Allies seemed like a good start to many nationalists. With America's entrance into WW1 and the increasingly influential leadership of Woodrow Wilson in the West, it seemed like China's best hope to get back some of its rights and territory occupied, as Wilson had of course been a huge proponent of the idea of Wilsonian self-determination. Japan really had no right to Qingdao even if they had been the ones to occupy it. The "Allies," now that China was a member, was a team effort. The issue was, however, that as Duan increasingly lost power in 1918, he made political moves behind the scenes to increase his standing with the most powerful foreign political force in China: Japan. By 1918 plans were already made, and loans distributed. Duan received Japanese materiel and loans in exchange for Japan keeping Qingdao and being allowed expanded railroad and port access across the entire province of Shandong. In September 1918, the Beijing government, the only government within a splintered China that was internationally recognized as legitimate, confirmed Japan's position in Shandong, and that was enough reason for an uninterested Western Versailles council to rule in favor of Japan the next year.

Consequences of the Treaty of Versailles in China

Immediately, Chinese diplomats and nationalists felt sold out. Not just by their own government, but also by Wilson himself. The issue with Wilson was that though he strongly espoused self-determination, he was also a leader who believed in the total legitimacy and sanctity of treaties, and for him the situation was final. Angered and disappointed, Chinese students, especially those in Beijing University, stormed into the streets. A massive student protest erupted in Tiananmen Square, calling on the warlord government to disband and re-instate the Republican constitution (which was suspended in 1917 after the Manchu Restoration). This is recognized as the beginning of the May Fourth Movement, named after the day in which the protest took place at Tiananmen. It is indeed a very important event for Chinese nationalism; Rana Mitter states in his book A Bitter Revolution: "The atmosphere and political mood that emerged around 1919 are at the center of a set of ideas that has shaped China's momentous twentieth century."

The event is heavily linked to the rise of organized communism at a national popular level. Several prominent future-CCP leaders were present at Tiananmen that day, and many soon found themselves heading south to help organize the CCP with the KMT in the next few years. In other words, Chinese nationalism stopped being exclusive to non-intellectuals. The battle against imperialism would expand beyond words in a book and into the hands of the Chinese peasantry who could boycott foreign goods, or join left-wing military wings of the KMT during the Northern Expedition a few years later. The event also further influences the course that leftism will take in China over the next few decades; like many other Eastern communist movements, it came to be entirely based off of anti-imperialist attitudes and how China could use communism as a way to defend itself against the West (which includes Japan).

Finally, the event also established the great schism between the warlord powers in China. Some warlords, especially in the south, began incrementally cooperating with nationalist entities. The cooperation would culminate in the decisive and shockingly quick victory of the Northern Expedition in 1926, which saw many sentimentally-nationalist warlord defect to the KMT in order to achieve the vision of a more unified China. Other warlords disregarded the protests as just that, and continued their cooperation with Japan as outright puppets (Zhang Zuolin) or as corrupt opportunists (Wu Peifu).

Conclusion

In February of 1922, China was given back Qingdao as agreed upon between the US, Japan and China in exchange for money. What ended up being an intense and extremely important event in the long run seemed like a short term set back at that time. In the end there was no apology or anything of the sort issued by anyone to China. For Japan it was business as usual, and the 1920-30s would see an increasingly belligerent Japan continually press China for more and more land and resources before outright war in 1937. Although it doesn't get much attention from many Western scholars, the Treaty of Versailles' influence in Asia proved to be quite momentous just as it was in Europe.

Sources

Asia after Versailles: Asian Perspectives on the Paris Peace Conference and the Interwar Order, 1919-33, ed. by Matthias Zachmann

"The May Fourth Movement and Provincial Warlords: A Reexamination," Zhongping Chen

Wilson and China: A Revised History of the Shandong Question, Bruce Elleman

The Shandong Problem was one of the big diplomatic incidents of the era. It's very important to remember that while Japan was a pretty centralised and unified democratic non-militarised country in this period, China was only barely a single country and was actually a giant patchwork of rival warlords only vaguely connected to each other.

From the beginning of the war, China had kept neutral despite mounting pressure from the Allies. In 1917, Chinese president Duan Qirui successfully gained control over the official government by crushing the Qing restoration uprising led by Zhang Xun. China was incredibly fragmented into various warlords, and he hoped that by joining the victorious side of WWI he would be able to gain international prestige and financial backing to consolidate the country. Communiqués show that he made two separate agreements, one with the Allies which confirmed the return of the German held territories in Tianjin and Qingdao in return for joining the war, and a seperate secret one with Japan which confirmed their rights over the German territories in Qingdao in exchange for substantial financing. Japan then invaded Qingdao and occupied the territory.

Duan believed he could now focus on unifying the country, but failed so badly at this he was forced to resign the presidency in 1918. It was only in 1919 at the Treaty of Versailles that it was revealed that Duan had secretly sold Qingdao to Japan, and Western powers mostly allowed Japan to stay in place without even any condemnation. This triggered a nationwide revolt known as the May Fourth Movement, which was led mostly by students but also merchants and warlords, championing a variety of causes including anti-traditionalism and what is widely considered the true beginning of modern Chinese nationalism and also the Communist movement. The domestic and international pressure was so strong that Chinese negotiators refused to sign the Treaty of Versailles (leaving them officially still at war with Germany), which placed much pressure on Woodrow Wilson who had been championing self-determination but also need Japanese support to set up the League of Nations.

For his part, Duan now used the financing he'd obtained from the Japanese to build a modern military trained by the Japanese army. Nonetheless he was still defeated in 1920 by a coalition of warlords, this made it easier for Wilson to declare Duan's deal invalid. In 1922, the US brokered an official peace with Germany through the League of Nations at the Washington Naval Conference, applying pressure on Japan to cooperate, which officially restored Qingdao to China but allowed Japan to continue having extraterrorial privileges. The May Fourth Movement had been very successful at boycotting Japanese goods, and had caused much economic unrest in Japan, which at the time was significantly dependent on the Chinese economy.