It's roughly the boundary of where the Chinese civil war burned out, both the PRC and RoC pledge to unify the country under their leadership but the borders largely stayed the same since the fifties.
Putting aside the idea of the Nationalists actually not dying horribly to the side for now, those borders make no sense.
1. There is no viable way for the Nationalists to support the Ma warlords with that sort of borders and with Xinjiang (presumably) under Sheng or a notional Uighur Soviet Republic they would wither on the vine. Historically the Mas surrendered even before Sichuan fell for a reason. The long looking borders are on some of the worst terrain on Earth and even today there is little direct traffic - most of which is routed through Communist-controlled Hanzhong. Guangyuan to Longnan is possible but it would still be a hideously vulnerable low capacity route.
2. The borders of Tibet pre-PoD would be the actual effectively controlled Xikang province area - if recollection serves would be east of the Jinsha River so it's not exactly the modern Tibetan Autonomous Region borders.
3. They took Shanghai and got stuck SOUTH of the Yangtze?! How did that happen?
4. The borders south of the Yangtze follow the provincial borders a little TOO well for a burn-out peace.
5. Did the Americans give them pity islands? That's the only way I can think of where they somehow took all the South China Sea islands. Historical PRC with a LOT less to worry about didn't really manage to even get there until the 80s.
I could go on but this will serve for now. I know China is really an afterthought so I suppose it hardly matters, just a spot of obsession. Nothing to see here.