Few Chinese had any illusions about Japanese desires on China. Hungry for raw materials and pressed by a growing population, Japan initiated the seizure of Manchuria in September 1931 and established the ex-Qing emperor Puyi as head of the puppet state of Manchukuo in 1932. The loss of Manchuria, and its potential for industrial development and war industries, was a blow to the Kuomintang economy. The League of Nations, established at the end of World War I, was unable to act in the face of Japanese defiance.