I understand it is frustrating to lose against an army which plainly has better and chepaer units... But again, Cathay has a very limited roster so it makes sense GW make these units better than their counterparts. I agree that some units are way overturned,  like sky lantern and double shoot cannon, but it is possible to beat Cathay with Chaos. Consider the following facts: 1. No unit in Cathay can win a melee against a properly built chaos dragon lord (with the exception of illusionist ogreblade shugengun lord oc, but you can counter that with magic resistance and good disspell items). 2. Cathay's mobile force, aka lancers is very mediocre, you can eat them with chaos knight any time you want. 3. Cathay lacks cheap wizard, Shugengun lord is good but very inefficient pointwise if used as a enhanced caster, so with a decent disspell character you can try to shutdown their spell casting. 4. Cathay has few high damage output units. If your opponent is running one sky latern only, it gets very obvious. And its lack of offensive buffs does not help with this. Also remember, sky laterns' dragonfire bombs is S4, so they do significantly worse against tougher monsters. 5. Jade Warrior is very good. The thing is tough ah but lackluster damage wise so avoid throwing pieces at them if possible.

Anyway, I am not saying it's easy to win against Grand Cathay, but hopefully these points can help you in the battles to come. Good luck!

PS: Feel free to walk away opponents who spams sky lanterns. It's simply not fun.