Someone buys their products from a factory in China, sells on e.g. Amazon US with their own brand, trademarked and everything. Then some Chinese entity trademarks it in China. The clincher is that since they have a Chinese trademark, they can put an export block on anything bearing that trademark, and so the US buyer can't ship their goods out of China anymore.
Because of this, people are being advised to register in China even if they never plan to sell anything there.