Chinese submarines would stress Japan's coastal control

Could China before 1937 use foreign-trained submarine crews to make Japan's position harder?

Yes, but Germany was a poor choice of trainer in 1937; properly trained Chinese crews and submarines could be serious, with the Dutch a more plausible model.

Germany was a poor choice for submarine training in 1937 because its own force was weak at that point. Properly trained Chinese crews and boats could still create serious problems for Japan, with the Dutch offered as a more plausible training source. Coastal and canal traffic might also provide openings even when Japanese forces controlled the ports.