"China is in Asia."
Translation:Ĉinio estas en Azio.
It's because the countries are named after the people rather than the people being named after the country. So Ĉino would be a Chinese person and Japano would be a Japanese person, just like Ruso and Germano are a Russian and a German whereas Rusio and Germanio are Russia and Germany. For country based names we replace -o with -ano to refer to people. Brazil is Brazilo and a Brazilian is Brazilano.
Basically, if the people were named first and the country took its name from them, the -o ending is the people. Yet if the country was named first and then people took their name from it, the -o ending is the country. Whichever came first, gets the -o.