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In a PBEM match, I dropped a Japanese paratrooper unit onto undefended Yenan, which at the time was 3-4 hexes behind the front lines. The Red Chinese armies and the HQ were outside the borders of Communist China.
At the end of the turn, I got the message that Communist China had surrendered and I got the plunder.

BUT, the three Red Chinese units did not disappear as Minor power units typically do after a surrender.

My question is--did my opponent simply have the amazingly good luck that ALL three of them became "Free" units (which I think is a pretty low percentage chance for each unit)? Or is there something unique about the Red Chinese and their units are scripted not to surrender?

Given the historical nature of the Communist Chinese war effort--they fielded what amounted to a powerful guerrilla force rather than conventional formations--it makes some sense that they would not surrender merely due to loss of territory, but I was just curious.

Yes, they have become free units and Communist Chinese have a 100% chance of doing so if they're outside their home territory when Yenan should be captured. They did one long march, so are considered to be up for another if necessary...

Thanks, Bill! Makes perfect sense. So, I'm guessing the main advantage to me in this particular case is that the Allied player cannot recruit/replace any further Red Chinese units unless he liberates Yenan.

Exactly, while they also lose some income too.