GOOD MORNING FROM LONDON
#1 FOREIGN FIRMS IN CHINA CLOSING DOWN
SOUTH CHINA MORNING POST
#2 INDIA’S PRIME MINISTER TALKS UP BRICS
NIKKEI ASIA
#3 CHINA AND JACK PERRY – PART 10
JACK PERRY DISCUSSES CHINA’S 1952 BUSINESS PROPOSAL.
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#1 FOREIGN FIRMS CLOSING DOWN IN CHINA
SOUTH CHINA MORNING POST
“The world’s largest jewellery company by volume is facing a wave of store closures across China – a move that serves to illustrate a broader retreat by foreign brands as consumer preferences shift towards practical products that offer more value for the money.
Danish jewellery brand Pandora, announced in its second-quarter earnings report on August 15 that it would expand its original plan to close 50 stores in China this year to 100 stores.
According to the 2025 China Shopper Report released in June by Bain & Company and Worldpanel, Chinese domestic brands have steadily eroded the market share of foreign brands, with local brands accounting for 76 per cent of the market by 2024. That was up from 75 per cent in 2023, 74 per cent in 2022, and 73 per cent in 2021. Back in 2012, it was 66 per cent.”
GRAHAM PERRY COMMENTS;-
The foreign firms closing stores in China has two features – economic and political.
Economics is the U.S. tariffs. Trump’s attack on trade partners has a consequence. It cannot be shrugged off – China is affected. It has an economic impact. It includes include fast-fashion clothing brands such as GU, owned by Japanese multinational Fast Retailing Group, and Spain-based Zara, as well as beauty and skincare brands such as Australia’s Aesop and Japan’s Decorte. Retail chains such as US-based Walmart and Japan-based Aeon have also announced withdrawals from certain regional markets.
Chinese consumers are tightening their belts. Consumer spending has taken a hit and the China market – in common with world markets – is seeing restraint and caution and not expansion and growth.
There is another factor – less appreciated but still relevant in assessing the consequences of the downturn. The Chinese consumer is loyal to the Chinese producer. Nationalism is part of the mindset of the Chinese consumer – this will take aim against U.S. products in China because of Trump’s tariffs, and not against other countries who are not pursuing economic vendettas against China. U.S. manufacturers will therefore face a double whammy – first, a general economic downturn due to U.S. tariffs and, second, the instinct of the Chinese consumer to punish U.S. products in China because of the Trump Tariff assault.
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#2 INDIA’S PRIME MINISTER ATTENDS BRICS
SUMMIT IN BEIJING
THE FINANCIAL TIMES
“The summit will mark the first visit to China by India’s Prime Minister Narendra Modi in seven years — a signal of New Delhi’s deep frustration with Washington over Trump’s tariff war. Modi and Xi are due to meet on Sunday.
This is a group of countries that have been significantly antagonised by the west, especially by the US,” said Yun Sun, senior fellow at the Stimson Center, a Washington think-tank. “China is bringing them together and making a statement about global governance and the global order . . . It will be saying that we, the SCO, have a very different vision.”
The Shanghai Cooperation Organization — a forum that originated in post-cold war efforts to resolve border and security disputes between China, Russia and central Asian countries — is not a defence alliance, but its members co-operate on anti-terrorism and some hold joint military exercises.
China which holds the SCO’s rotating presidency this year, aims to use that position to “demonstrate to the rest of the world that if there’s a China-led world, it won’t be led in conjunction with Europe or the United States”, said Yu Jie, senior research fellow on China in the Asia-Pacific Programme at Chatham House. “China is emerging politically as a clear winner at the moment,” said Yu. In addition to Modi and Russian President Vladimir Putin, Xi will be joined by about 20 other leaders at this year’s summit, which will be the SCO’s biggest yet, according to Chinese Communist party media outlet Qiushi. Participants include Pakistani Prime Minister Shehbaz Sharif, Iran’s President Masoud Pezeshkian and Turkey’s Recep Tayyip Erdoğan as well as UN secretary-general António Guterres.
GRAHAM PERRY COMMENTS;-
The summit comes days after Washington raised tariffs on Indian exports to the U.S to 50% this week because of India’s purchases of Russian oil.
The Summit takes place notwithstanding tensions between some participants. India and Pakistan, which fought a brief armed conflict in May of this year and Chinese and Indian troops clashed along their shared border in 2020. China and India have been at loggerheads since a war in 1962. Relations hit a low five years ago following deadly clashes along their disputed Himalayan border.
Tensions between China and India rose again in May over China’s alleged supply of fighter jets to Pakistan. But changes are underway. Modi welcomed China’s Foreign Minister Wang Yi to India last week, and the countries agreed to revive travel and trade ties, notably Chinese supplies of rare earths, fertiliser and tunnel-boring machines. Beijing and New Delhi agreed last year on patrols of their 3,500km border, and Modi and Xi met at the BRICS summit in Kazan, Russia.
The world is changing quite rapidly. 1945 saw the emergence of the U.S. and U.S.S.R. superpower duopoly. 1991 saw the collapse of the Soviet Union which left the U.S. as the sole superpower at the apex of its power. Now there are two superpowers again – the U.S. and China – but this is no mirror image of 1945. China does not seek a duopoly of the U.S. and China. It seeks something quite different and quite new – a multi-polar world where no country seeks to dominate and instead a world where there are a number of countries emerging as the leading powers – Indonesia, Mexico, Turkey, Malaysia, Nigeria, Saudi Arabia, Argentina, Brazil and the European Union together with the U.S. Russia and China. There are others including Iran, Australia, South Africa, Vietnam Peru, and Canada.
Change is the dominating feature. The old certainties are passing as the newly emerging countries adjust to the vacuum created by the collapse of superpower rivalry. China will grow in influence but it will not follow the path laid down by the U.S./U.S.S.R. superpower rivalry. And bear in mind that whilst the U.S. has 800+ military bases across the world, China has just one.
BRICS is the symbol of that change. Multi-polarity is In and the Superpower world is Out.
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#3 CHINA AND JACK PERRY. PART 10
JACK REFLECTS ON CHINA’S PROPOSAL TO ESTABLISH BUSINESS LINKS WITH CHINA.
Part 9 concluded as follows
“Ji Chaoting responded; the Chinese delegation would leave soon but Ji, Lu and two colleagues would leave for East Berlin where a new office was to be opened by the CNIEC – the China National Import-Export Corporation as a contact base for West Europeans who could visit East Berlin without formality, passports, visas etc. As the Chinese had no diplomatic relations in Europe except Switzerland, the Johannesof Hotel in East Berlin would become their European Branch. The office would formally open on 1 May 1952 and Chaoting suggested that I attend the opening when I could give a considered response to the business proposal outlined by Lu Hsuchang.”
Jack continued – “This seemed very practical. It would give me time to discuss these developments with Doris and then start the difficult negotiations with my dress company colleagues and their purchase of my shares. This, of course, on the assumption that my future would now be bound up with China. I still had to think this through” .
How was Jack to respond? What would his wife, Doris, say? What would his fellow dress business Directors say? And did the British Communist Pary have a view? There were questions to be addressed.
Jack had much to think about. He first had to discuss the China initiative with his wife, Doris. She, in effect, had a right of veto. If she was against the proposal Jack would remain in the dress business. It was that simple. Jack recalls:-
“I arrived back in London. Doris was keen to find out how the Conference went, but we held out until the children had been tucked up in bed. We then sat in the lounge where I recounted in detail the Chinese proposal that would completely alter the future course of our life.
During my narrative, Doris was motionless. No expression crossed her face, no movement disturbed her concentration. When she finished I awaited her reaction. She pondered briefly weighing the implications and said;
“Jack, this is a wonderful opportunity, not only for you but for the whole family. Our children, as time goes on, will also share in these new possibilities. You must accept this proposal. There may be some immediate difficulties. I imagine your colleagues at the office are not going to be very pleased with your news and discussions with them may be difficult. But I think your duty is clear.”
“Are you not worried” I asked “by the possibility of some financial insecurity? It may take some years for my interests in the companies to be acquired, leaving us with little capital if we should meet some disappointment”
Her reaction was predictable. “We have never lived other than modestly: so long as we can give our children a reasonable education, our own lifestyle is not the major consideration. You have a new and exciting future beckoning. We will share it with you.”
Her reaction was a great comfort to me. There were no hesitations, no doubts, only whole-hearted confidence. This was Doris at her most loyal, supportive and modest, but firm and determined”.
With Doris’s support now apparent, Jack set about the issues before him – extricating himself from his dress business and then a meeting with senior personnel in the Communist Party.
His meetings with his fellow Directors were not easy. They were reluctant to let Jack leave because they knew he was the main business energy and his departure would leave the company vulnerable. But they could see that Jack wanted to make the change from dress sales in the U.K. to trading with China and an accommodation was reached.
Jack’s discussions with the British Communist Party were of a different nature. Naturally they were positive about the initiative and encouraged Jack to respond positively to the Chinese business proposal. The Party favoured any initiative that supported the development of trade between the U.K and the West because it was a challenge to the policy of John Foster Dulles, the U.S. Secretary of State in the new Eisenhower administration, which sought to isolate the U.S.S.R. and China from international trade – believing that such an embargo would hasten the demise of the two countries – the U.S.S.R and the PRC – the People’s Republic of China (then just three years into its existence.)
The Party had a second reason to support Jack’s China business initiative; the CPGB (Communist Party of Great Britain) was close to the Soviet Communist Party but lacked any relations with the CPC (the Communist Party of China). Jack was called to a meeting with George Matthews the Editor of the Communist Party’s newspaper – the Daily Worker – and a senior member of the Party.
He informed Jack that the Party was close to the Communist Party of the Soviet Union but lacked relations with the CPC. Matthews asked Jack to contact the CPC – when visiting China in 1953 – and inform them that the CPGB wanted to establish fraternal relations with the CPC. We will come to Jack’s first visit to China in 1953 later in the narrative but his links with CPGB left him with clear instructions to inform the CPC that the CPGB wanted to establish fraternal relations with the CPC.
This was 1953. The Sino-Soviet split had yet to occur but – when it did – links between the CPGB (The British Party) and the CPC (the Chinese Party) were severed but we will come to that significant break up later in the narrative.
PART 11 – IN 1952 CHINA INVITES JACK TO VISIT CHINA IN 1953.
