GOOD MORNING FROM LONDON
15 JUNE 2026. CHINA POST #625
CHINA AND THE FOREIGN MEDIA
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EXTRACTS
#1 CHINA SHOPS FOR CONSUMER BRANDS IN FOREIGN MARKETS.
#2 CHINA RARE EARTH DOMINANCE REINFORCED.
#3 CHINA’S TUNGSTEN EXPORTS TO JAPAN DIVE.
TENSIONS RISE.
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IN SUMMARY
IN SUMMARY #1 – CHINA SHOPPING IN U.S.
In Summary #1 the focus is on further evidence of China’s emergence on the world stage.
Put simply, China is looking to link with foreign consumer brands to enhance the status on the international stage of its own domestic brands, In part this is due to the slow speed of development of internal demand in China. Chinese buyers are not big buyers and in times of retrenchment due to tariff consequences for world trade, China’s consumer brands are looking to buy foreign brands to provide outlets for their own product.
One point – so often in the historical narrative observers bracket China with the USSR. But the USSR never reached the path that China is now treading with such enormous consequence. Another reason to examine China on its own terms and not always to link it to the failed experiment of the USSR.
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IN SUMMARY #2 RARE EARTHS AGAIN – THEY MATTER.
In Summary #2 Rare Earths is again the focus. Remember it is Numero Uno in the U.S.-China relationship.
In a phrase “America blew it”. Because of its oversight it handed to China one issue that has allowed China at a stroke to change the power balance between the two countries. The U.S, needs rare earths desperately for every car engine, every computer, every piece of advanced military technology, China has them and the U.S. doesn’t. This one issue has tipped the balance of power between the two giants.
The U.S. – without realising how they failed to see this coming – is now working double time to get back on even terms. This article records the steps China is taking to ensure it never surrenders its new found advantage. When it comes to Rare Earths and its impact on International Politics, China will be paying close attention to the steps it needs to take to protect its significant advantage.
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IN SUMMARY #3 – CHINA AND JAPAN – VERY ROCKY
In Summary #3 the focus is on the growing tension between China and Japan.
Japan’s imports of tungsten from China fell 50% in April compared with the 2025 monthly average after Beijing increased export restrictions on the mineral early this year, forcing Japanese companies to scramble to find new sources.
Tungsten is a rare metal essential to make carbide tools used to process parts for automobiles and aircraft. It is also used in other applications, including electronic equipment, chips and military applications like artillery shells and missiles. China controls roughly 80% of the global market.
China is increasingly exhibiting power and confidence but it is most unlikely to overplay its hand. It has an instinct and a feel for the strengths and weaknesses of its rivals – and Japan is a rival. China knows when to lower the temperature and pursue the talk-talk option. It also knows when to cast aside restraint and move onto the front foot,
Taiwan is a non-negotiable issue and the Japanese Prime Minister stumbled when she referred to the idea of Taiwanese independence as a possible option. This is the core issue. And the China-Japan tensions created by Japan’s 1937 Rape of Nanjing are never far from the surface.
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#1 CHINA SHOPS FOR CONSUMER BRANDS IN FOREIGN MARKETS
THE FINANCIAL TIMES
“Chinese companies are buying up a growing number of overseas consumer brands as intense domestic competition spills over into international sectors relatively removed from geopolitical tensions.
The FT reports that just months after Chinese apparel conglomerate Anta acquired a 29 per cent stake in Puma for €1.5bn, ultra-fast fashion retailer Shein this week struck a deal to acquire “sustainable” US clothing brand Everlane for a reported $100mn. Nestlé last month confirmed that it had sold its majority stake in US chain Blue Bottle Coffee to Centurium Capital, controlling shareholder of cut-price Luckin Coffee, which has tens of thousands of stores in China.
Chinese companies’ appetite for outbound M&A has increased after years of unrelenting competition and deflationary pressures at home. There were $2.4bn of outbound consumer goods deals in the first quarter of this year, almost all in Europe and North America.
GRAHAM PERRY COMMENTS;-
The FT reports last year’s $6.8bn total of overseas investment by Chinese companies in the consumer goods market was the highest since 2018, according to data from consultancy Rhodium Group. “Consumer goods is one of the few sectors that remains relatively open to Chinese investment in advanced economies,” said Armand Meyer, an analyst at Rhodium. “Chinese firms with maturing domestic brands are looking to expand their international footprint at a time when the domestic economy is slowing,” he added. “Acquiring established foreign brands is a faster and more effective path than building from scratch.”
Anta’s stake in Puma is the latest in a longer-term strategy of overseas purchases, including a 2019 buyout of Amer Sports, the owner of Salomon and Arc’teryx, before Amer was relisted in New York in 2024. Anta has also bought German clothing business Jack Wolfskin, and owns the rights to Fila in mainland China. “Anta is a poster boy for this kind of strategy,” said Josh Perlman, head of Greater China at Authentic Brands Group. Authentic Brands is in the process of relaunching Reebok in China, as well as US luxury brand Guess, which this year closed all its stores in China. China’s overall outbound investment was $27bn last year, the highest since 2020, driven in part by mining assets in emerging economies.
The FT further notes that China’s vast EV industry is also expanding globally but that figure is dwarfed by the $200bn-plus of outbound M&A in 2016, shortly before trade tensions erupted in President Donald Trump’s first term and continued to escalate over the ensuing decade.
China is coming – at its own pace and in its own time. China has a plan to play a big role in international trade and in consumer markets, but the timing and the location and the size of China’s ventures overseas are a subject of intense analysis and preparation in China. Remember – the world in the main does not understand China. They have made so many mistakes – all resulting from flawed analysis of China’s direction and speed of travel and the mistakes occur and will continue to occur because the U.S. just cannot get to grips with the mindset of China’s development. The U.S. misunderstanding of China is deep seated.
China is new. It is different. Its motivation and momentum is only understood in the context of China’s past and that past does not begin with the Cultural Revolution – important though that is to an understanding of China today. China is not like us – it has different priorities, impulses, motivations and thought processes. But the West is blind. Washington and Brussels thinks China is fumbling for the capitalist model of development and working out how best to ape the City of London and Wall Street, Piccadilly Circus and Fifth Avenue. Wrong. Think Again Dick Whittington.
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#2 CHINA RARE EARTH DOMINANCE REINFORCED
SOUTH CHINA MORNING POST
“A new type of deposit in Heilongjiang and Jilin promises easier, cheaper mining than in southern clay-rich areas, say scientists in China who have identified a new type of rare earths formation in the frigid northeastern regions of China.
Unlike the clay-heavy deposits of southern China – which require chemical leaching to release the elements – the northern formations consist of loose sand and gravel formed by natural freeze-thaw cycles. This difference could make extraction more efficient, less costly and better for the environment.
The find could help China further secure its global dominance in rare earths production, just as Western countries – including the US – scramble to secure supply chains for the critical elements.
GRAHAM PERRY COMMENTS;-
Let’s remind ourselves again – rare earth elements are a group of 17 critical minerals – including cerium, neodymium and dysprosium – that are used to produce electronics, large magnets, superconductors, and green and defence technologies. As the world’s largest producer and consumer of rare earths, China handles nearly 90 per cent of global processing of the critical minerals.
Currently, the abundant deposits found in southern China contain mainly heavy rare earth elements, while those in the north – such as the Bayan Obo mine in the Inner Mongolia autonomous region, the largest rare earth deposit in the world – contain mainly light rare earth elements.
Heavy rare earth elements are generally more valuable because they are scarcer and harder to extract, with demand driven by their role in the production of permanent magnets and electric vehicles
After conducting surveys and sampling in Heilongjiang and Jilin, the
team identified a new type of deposit containing abundant levels of both light and heavy rare earth elements.
Since Seoul 2025 when China, in response to mounting U.S. tariffs, played its Rare Earths card the U.S. has buckled and China’s newly found leverage has changed the balance of power between the two countries. When China talks, the U.S. now listens.
But China has correctly identified that the U.S. will go into overtime to break the stranglehold that China’s Rare Earth dominance has established. And China will be responding by doubling up its domestic extraction as well as cementing supplies from overseas. Chian has built a unique world Rare Earth position – it will not become complacent.
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#3 CHINA’S TUNGSTEN EXPORTS TO CHINA FALL SHARPLY – WHY?
NIKKEI ASIA
Japan’s imports of tungsten from China fell 50% in April compared with the 2025 monthly average after Beijing increased export restrictions on the mineral early this year, forcing Japanese companies to scramble to find new sources.
In response, Japanese companies have ramped up imports of tungsten scrap from the U.S. and elsewhere, aiming to maintain supply to domestic manufacturers by raising the recycling rate.
Tungsten is a rare metal essential to make carbide tools used to process parts for automobiles and aircraft. It is also used in other applications, including electronic equipment, chips and military applications like artillery shells and missiles. China controls roughly 80% of the global market.
Japan’s imports in April of three Chinese tungsten-related goods subject to export restrictions fell 50% compared with the average monthly volume in 2025. Compared with April 2024, before China implemented the restrictions, imports were down 63%”
GRAHAM PERRY COMMENTS;-
Nikkei Asia further reports that China’s trade statistics show countries other than Japan received tungsten-related goods from February to April, but exports to Japan had completely stopped.
Japanese statistics still show imports arriving from China even after February due to customs procedures and transportation time lags. But imports of some goods have ceased since February, and other goods could face declining import volumes going forward.
China has used rare metals and rare-earth elements, in which it holds leading global market shares, as a diplomatic bargaining chip. With no signs of improvement in Japan-China relations, economic pressure on Japan using critical minerals is likely to continue.
China supplies about 80% of tungsten, which is essential for carbide cutting tools, used by the world. (Sumitomo Electric Industries)
Sumitomo Electric Industries President Osamu Inoue said at an earnings briefing this month that tungsten procurement from China “has completely stopped.” The company previously sourced about 30% of its raw materials for cutting tool production from China, but Inoue said the supply has ceased since January due to the export restrictions.
The impact is beginning to spread to production. A carbide tool manufacturer in Osaka is considering a roughly 20% production cut. “We are currently managing with inventory on hand, but we need to reduce production volume if we want to continue producing,” said a representative.
Take a step back from Tungsten and consider the geo-political tensions between China and Japan. There is history – violent genocidal history and as recently as World War II. There is also a relevant UK-Germany comparison. The UK stood alone in the summer of 1940 and the battle for the skies above London was between Great Britain’s Spitfire and Nazi Germany’s Messerschmitt. For nine months commencing in 1940 the Germans bombed the docks of London, Many died and much property was destroyed, The contempt, not to say hatred, that the British people felt for the Nazis and the people of Germany was intense and lasting well into the post 1945 period.
There is a parallel experience – this time between China and Japan – in The Rape of Nanking also known as The Nanjing Massacre which occurred over a period of six weeks commencing in December 1937 and was the mass rape and murder of Chinese civilians, noncombatants, and prisoners of war by the Imperial Japanese Army in Nanjing, the capital of the Republic of China.
After the outbreak of the China-Japan War in July 1937, the Japanese had pushed quickly through China after capturing Shanghai in November. As the Japanese marched on Nanjing, they committed violent atrocities in a terror campaign, including killing contests and massacres of entire villages.
The massacre began on December 13 1937 after Japanese troops entered the city after days of intense fighting and continued to rampage through it unchecked. Japanese soldiers murdered civilians, including children, women, and the elderly. Japanese units also summarily executed thousands of captured Chinese soldiers in violation of the laws of war, as well as male civilians falsely accused of being soldiers. They raped women and girls, their ages ranging from infants to the elderly, and destroyed one third of the city with arson. Rape victims were often murdered afterwards. In addition to civilians, Japanese units indiscriminately murdered tens of thousands of Chinese POWs. The massacre is considered one of the worst wartime atrocities in history.
China’s feelings about the Nanjing Massacre – however deeply experienced – are controlled but only up to a point. Maybe you can recall the Belgrade deaths of China’s embassy officials? On May 7, 1999, a United States Air Force B-2 Spirit, participating in the NATO bombing of Yugoslavia, dropped five Joint Direct Attack Munition satellite-guided bombs on the Embassy of China, Belgrade, FR Yugoslavia, killing three Chinese journalists and injuring twenty-seven others, known in China as the May 8 incident. According to the US, the intention had been to bomb the headquarters of Yugoslav weapons importer Yugoimport, 440 meters south on the same street. President Bill Clinton apologized for the bombing, claiming it was an accident.
It triggered angry and lengthy protests outside the U.S. Embassy in Beijing, The Chinese feel the same about the Nanjing Massacre and anger and indignation lies – always – only just below the surface of ongoing China-Japan relations. Tensions are sharpened by the perceived failure of Japan to make fulsome apology for the Massacre. The issue is always lurking in the shadows and Japan’s mooted support for Taiwan independence always risks an outbreak of vehement anti-Japanese sentiment outside the Japanese Embassy in Beijing.
GRAHAM PERRY
IN THE NEXT CHINA POST – #626 – I WILL RETURN TO THE ACCOUNT OF DR JI AND JACK PERRY AND THE EARLY DAYS OF CHINA – UK RELATIONS. FROM 1950.
GRAHAM PERRY
