A number of pencil manufacturers, including Hardtmuth, now sourced their graphite from Siberia—the vast Russian province which shares borderland with China. That geographic proximity was key for Hardtmuth as it devised its marketing scheme.
In China, yellow had long been tied to royalty. The legendary ruler considered the progenitor of Chinese civilization was known as the Yellow Emperor; thus, centuries later in Imperial China only the royal family was allowed to wear yellow. Eventually, the shade came to represent happiness, glory, and wisdom.
Great story. I would love to see a list of products and the stories behind a particular colour or a specific shape; I can only think of blue jeans, white earbuds, and possibly the Laguiole knife. If you think of something, hit me up on Twitter.