GOOD MORNING FROM LONDON
20 MAY 2026. CHINA POST #622
CHINA AND THE FOREIGN MEDIA
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EXTRACTS
- FUKIYAMA ON CHINA’S DEMOCRATIC CHALLENGE
- CHINA’S LACK-LUSTRE EARNINGS?
- U.S. IS UNHAPPY WITH BARBADOS
- XI JINPING AND THE MILITARY
- TEA FROM CHINA IS COMING TO THE U.S.
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#1 FUKIYAMA ON DEMOCARCY IN CHINA
SOUTH MORNING POST
““I think that the Chinese have created a pretty impressive system. It is authoritarian. It’s quasi-market-based and they are very successful at marshalling new technology,” Fukuyama told Harris. “They’re capable of innovating a lot of things we thought they weren’t able to do. And conversely, democracy, especially American democracy, looks like it’s falling apart … if the Chinese keep their development machine going, it may turn out that they have a real alternative.”
GRAHAM PERRY COMMENTS;-
Every now and then words can grab you. They resonate. You say to yourself ‘That Is Right’. They fall into place. This paragraph from Francis Fukiyama touches the chord.
The man himself – a leading U.S. academic, he became famous when he associated the collapse of the USSR in 1991 with the End of Ideology, the title of his famous book on History. He contended that Communism was dead; that Capitalism had triumphed; that Ideology – of the vibrant Marxist kind – was finished. But Fukiyama made the mistake committed by many other people – politicians, historians, social scientists, business monopolists alike. They missed the significance of China. Across the intellectual and commercial world China was dismissed. They were wrong. Even then it was quite apparent that China would come of age but the thinkers and the predictors and the long-term planners were prisoners of their own prejudices and simply could not see what was underway in China – and had been since 1977 and Deng Hsiaoping’s return to power.
The key to success in business, politics, war and sport is to know the mindset of your opponent – inside out, from top to bottom, micro and macro. But just as the U.S. failed to see the strategic significance of Rare Earths so the world at large consumed with its own agenda failed to see the changes underway in China. Fukiyama was amongst them and it is therefore very interesting to read his words about China today.
Leave to one side for the moment the issue of totalitarianism to which I will return in future posts of Good Morning From London, it is when Fukiyama says if the Chinese keep their development machine going, it may turn out that they have a real alternative.” that we witness the birth of something knew – Western intellectuals are beginning to wake up the significance of the challenge from China. They know there is a challenge and it is to the fundamental edifice of the Western democratic tradition. China’s surge is forcing a rethink about the predominance of Western democratic norms. Do they deliver? Can they be relevant in the future? Or is the Chinese authoritarian model going to grow in appeal? How can something that is authoritarian be democratic, be people friendly? This is the Big Question going forward. The Chinese political model is on the agenda. China is becoming increasingly centre stage.
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- CHINA LACKLUSTRE EARNINGS
NIKKEI ASIA
“Chinese companies are reporting lackluster earnings, with overall net profit declining in 2025 for the third consecutive year as the property slump dragged on and more retailers posted losses, hurting employment and the economy as a whole.
Nikkei compiled earnings for about 5,400 nonfinancial corporations listed on mainland Chinese exchanges, based on data from data provider Wind. Nearly all such companies had reported earnings by April 30.
Total net profit for the fiscal year ended December 2025 was 2.54 trillion yuan ($372 billion), a 2% decline from the year before, and the first time this number has fallen for three years running in data going back to 2000.”
GRAHAM PERRY COMMENTS;-
Well, what did you expect? Sky high profits? Order books full to over flowing? Record returns?
Life is not like that. China, like the rest of the countries in the world, are wrestling with the trade damaging policy play of President Trump. The policy has consequences; trade is harmed; new approaches and new initiatives are required as countries seek to preserve their nation’s standard of living during this period of assault on the norms of international trade.
Only one country took the tariff battle to the U.S – China. Beijing refused to bend. It met Trump head-on and Trump blinked. The U.S. for at least 30 years had overlooked Rare Earths. The home of thriving capitalism failed to spot the glaring error of missing Rare Earths. It is quite incredible that the Country which spawns the biggest number of Business Schools missed out on its key SWOT analysis – Strengths, Weaknesses, Opportunities and Threats – when it came to Rare Earths.
Nikkei Asia reports that China’s dominance over rare-earth metals, – needed for high-tech products ranging from electric cars to weapons, – is one of Xi’s most powerful cards in international diplomacy. The country produces around 70% of the world’s rare earths and handles as much as 90% of refining.
Nikkei Asia further reports that China Rare Earth Nonferrous Metals, a listed unit of China Rare Earth Group, reported a net profit of 127.55 million yuan for last year, reversing from a net loss of 298.50 million yuan in 2024.
Other players have reported solid results including China Northern Rare Earth (Group) High-Tech, which is the largest producer under control of the government of Inner Mongolia; and Shenghe Resources Holding, backed by China’s Finance Ministry; and China Northern Rare Earth which stopped disclosing production and sales data on six rare-earth items — oxides, salts, metals, magnetic materials, polishing materials and hydrogen storage materials.
The Trump administration has made it a priority to address U.S. vulnerabilities in critical minerals, pursuing partnerships with other countries and announcing billions of dollars in commitments. But in the opinion of Ken Koyama, senior managing director and chief economist at the Institute of Energy Economics Japan, “it is “impossible, or extremely difficult, to break away from the Chinese dominance of rare earths.”
Koyama is right. China is determined to maintain its leverage strength and the U.S. knows that. Something really significant took place in Seoul 2025 and History will come back to that date time and again as the new world unfolds. It was a moment in time; a line in the sand, a point of no return. China will never crow about it – that is not their style. They will be low key and not trumpet their breakthrough moment. But Beijing knows there has been a big world shift in power and the White House knows it too.
In the years ahead Historians will be writing books with the title “Seoul 2025”. It will be a best seller. How did the Chinese do it? What steps did they take? And with which countries did they take them? And on what terms? And it wasn’t done by stealth. There was no secrecy. It was business. The U.S. went to sleep. They missed it. Even to write the words is incredible. Why did the U.S. not see it coming? What failed in the U.S. model?
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- U.S. DISPLEASED WITH BARBADOS
THE ECONOMIST
“The U.S was already displeased with the Caribbean country, which lies about 50 miles from Florida. Its ambassador has publicly criticised the “archipelago for borrowing $285m of Chinese money to build a state-of-the-art hospital. Chinese firms also operate two of its major ports. That irks Donald Trump, who is trying to reassert American influence in the region.”
GRAHAM PERRY COMMENTS;-
The Chinese are not everywhere but sometimes it seems like that. And what are they doing? Building military bases? Storing weapons of mass destruction? No – China is assisting Barbados to build a major hospital.
Some people are in denial. They refuse to see the real world. They are looking for Chinese submarines, Chinese soldiers, Chinese sailors, Chinese pilots, Chinese military bases, and Chinese weapons. Instead they get new ports and new roads – and new hospitals.
The penny will drop eventually. They will realise that The Belt and Road Initiative (BRI) really is something different and it is changing the world. Too many people are caught in a mental time warp. They have had a lifetime of sinister propaganda – it was “debt-trap diplomacy”. No it wasn’t but It takes time to shrug off the anti-China propaganda and adopt a different world outlook. But it is coming. Today is 2026. Think about the world in 2046 and then how about 2066. What will be the impact of BRI in forty years?
READ ON – TWO MORE ITEMS BELOW;-
XI JINPING AND HIS MILITARY AND
CHINA TEA INTO THE U.S. – BIG PLANS
4 XI JINPING AND HIS MILITARY
NEW YORK TIMES
“The following year, Communist Party investigators accused him and General Wei, who had been the defense minister from 2018 to 2023, of taking large bribes, trading in military promotions and compromising weapons production with their corruption.”
GRAHAM PERRY COMMENTS
No question – this is a big issue and one generally given insufficient attention by China watchers. It is China’s strength and not China’s weakness. Since Mao Tsetung started writing about U.S. Imperialism and Paper Tigers and the world picture, China has always assumed that the country was on the U.S. hit list and behind the political moves in the South China Sea, the Indian Ocean, the Pacific Ocean lies U.S.-China tensions.
In 1929 Stalin warned the USSR it had ten years to prepare for the inevitable war that was going to come in Europe. He knew that the USSR was on the West’s Hit List. Why? Because the USSR represented the Communist Challenge to Capitalism. It could not be allowed to succeed so it would be stifled, diminished, reduced in size and influence.
The U.S. has always felt the same about China. The Korean War was about inflicting defeat on China. The U.S. failed. Again in 1965 when the U.S. had close to 500,000 troops in S Vietnam there was a talk of a preventive war against China. And today the U.S. military power in the Far East is substantial and the Joint Chiefs of Staff and Foreign Affairs regularly write and speak about preparation for war with China.
In strategic geo-political terms the U.S. views China through two lenses; first, as a rising economic power and, second, as a regional hegemon. The relationship is Head-to-Head and in the eyes of Washington the U.S. must eclipse China
China is not blind. There is jaw-jaw but there is war-war as well. And China has remained in a permanent state of military preparedness. It is therefore crucial for China to ensure that its military, especially in the higher echelons remain focused, strategic and committed. There can be no private interests, sectional preferences, or Provincial loyalties. All decisions can be made on one basis only – What Is Best For China and not What Is Best For Me. Xi’s focus is ever-active and any signs that standards are falling and Self Interest – in whatever form – is taking root and Xi will act. Sometimes Xi is ridiculed because he appears to lack personality and excitement but many people are now realising that Trump embraces personal qualities that come at great cost to the U.S. Xi is the Boss. And the Military, like the Billionaires and the Party and the People know that with him in charge China is on the path to Stability and Prosperity. – the two key watchwords.
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- CHINA TEA IN THE U.S.
NEW YORK TIMES
BACK IN CHINA Emily Chang’s job was to promote Starbucks. “We were nurturing coffee culture in a country that knows centuries of tea,” says the former chief marketing officer of the American firm in the People’s Republic. Now Ms Chang works for Chagee, a tea chain little known outside China, and is doing the opposite. Her task is to champion the Chinese brand and tea-drinking habit in coffee-centric America (and to resist a tendency to mispronounce Chagee—the letter g is soft).
Last year the chain became one of the many firms trying to gain a foothold in America. Their outlets offer bubble tea, fruit tea and fresh Chinese tea, sometimes capped with milky foam. The Chinese newcomers are taking on the long-established competition from Taiwan which helped spread the word “boba” in the first place. (It was originally a Chinese slang term meaning “busty”, as a synonym in English for bubble tea with its pearl-sized balls made of tapioca starch.) In America the coffee market is 28 times bigger than that of freshly made tea, reckons Huachuang Securities, a brokerage. This, it says, theoretically creates “vast substitution potential”.
GRAHAM PERRY COMMENTS;-
It’s not all about Rare Earths and Taiwan and semiconductors and soyabeans. Overseas tea shops are now coming into play.
As the NYT reports;- HeyTea, an upmarket brand, has led the way, opening more than 40 American shops since 2023. Just nine of Chagee’s 7,500-odd global outlets are in the States. Mixue, a giant bubble-tea and ice-cream seller, is the world’s largest food-and-beverage chain. But just five of its 60,000 outlets are in America.
China is mounting a challenge to Gong Cha, a Taiwanese brand, that runs 2,200 outlets globally and more than 240 in America; Coco, another chain from Taiwan, has more than 5,000 franchises globally and dozens in America. The Chinese contingent wants to overtake them. Chinese firms are eager to find new customers abroad, says Tom Chen of Kepler Mission Design, an American marketing agency. “Chinese products don’t give you the caffeine crash.”
Tea is coming into play and time will tell whether Chinese marketeers can achieve success in encouraging U.S. consumers to switch from coffee to tea – Chinese tea
GRAHAM PERRY
