Mounting voter opposition to AI data center construction is reshaping the 2026 US midterm elections. A June Yale survey shows 58% of registered voters oppose building data centers near their homes, a sentiment shared by 53% of conservative Republicans and 74% of liberal Democrats. More than 300 cities, towns, and counties have enacted bans or moratoriums. In the first quarter of 2026 alone, 75 large projects were delayed or canceled, representing over $130 billion in investment. New York Governor Kathy Hochul signed the nation’s first statewide moratorium, and states from California to Texas are seeing growing protests and political fallout.
US consumer spending and business investment grew strongly in the second quarter, while inflation showed signs of cooling. The Federal Reserve left its benchmark interest rate unchanged at 3.5%-3.75% on July 29. Consumer spending rose 3.2% quarter-on-quarter, business investment increased 8.4%, and the PCE price index fell 0.1% month-on-month in June, its first monthly decline since 2020. Core PCE inflation remained above the Fed's 2% target at 3.3% year-on-year.
The US core personal consumption expenditures (PCE) price index rose 0.1% month on month in June, while the year-on-year rate declined to 3.3% from 3.4%. The overall PCE index fell 0.1% month on month, marking the first monthly deflation since April 2020. Service prices remained the main driver of monthly PCE increases. The energy component declined month on month, and post-release oil price gains were insufficient to reverse the trend.
Shanghai’s cultural tourism market recorded 313 million visitor trips in the first half of 2026, up 17.6% year-on-year, with total spending reaching RMB 543.3 billion, an increase of 8.75%. Inbound visitors surged to 5.31 million, up 27.82%, driven by strong growth from Russia, South Korea, and the US. The cruise sector handled 744,000 passenger entries, accounting for 74.2% of the national total. Silver tourism spending grew more than sevenfold, reaching RMB 55.7 million.
The Bank of England kept its benchmark policy rate unchanged at 3.75%, maintaining the current level of borrowing costs. The decision leaves the rate steady, with no change from the previous setting.
The European Union will allocate 10 billion euros (about 11.4 billion US dollars) to fund enterprises in building seven artificial intelligence factories. The initiative aims to boost AI infrastructure and competitiveness in the region.
The Ministry of Industry and Information Technology (MIIT) on July 30, 2026, abolished the "cascade utilization" policy for retired new energy vehicle power batteries, removing 100 companies from the standardized list. The move aims to eliminate market inertia and prevent fraudulent repackaging of used batteries. The notice also clarifies that retired batteries cannot be used in e-bikes or other prohibited areas. This follows a 2025 regulation that redefined comprehensive utilization as only recycling, and a 2026 joint enforcement action.
The Shanghai Municipal Government has issued an action plan for 2026-2028 to develop a high-quality sports event economy. It aims to create one to two world-class Shanghai event brands, cultivate internationally capable organizers, and establish a consumption ecosystem friendly to all times and demographics. Targets include cumulative participation of over 10 million in national-level and above events, over 30 million in mass sports events, and an economic impact exceeding RMB 100 billion.
The Politburo met on July 30 to set second-half priorities, calling for faster fiscal spending and bond deployment, advancement of "two major" national projects and "two new" equipment renewal and trade-in programs, and firm protection of the grassroots "three guarantees" (basic living, wage payments and government operations). Monetary policy will be used flexibly while fiscal-financial coordination is optimised to drive domestic demand. In H1, general public budget expenditure rose 1.5% to RMB14.33 trillion, boosted by 10.8% growth in healthcare and 7.6% in social security. The 2026 proactive fiscal stance includes RMB1.3 trillion in ultra-long special bonds, of which RMB572 billion has been issued. Basic pension subsidies reached RMB1.2 trillion and medical insurance subsidies RMB386.4 billion. A new RMB100 billion six-policy package combining fiscal interest subsidies drove more than RMB17 trillion in related lending and supported approximately RMB1.31 trillion in consumer spending, delivering 99 million person-times of subsidy benefits.
Japanese Prime Minister Sanae Takaichi announced on July 30 that the consumption tax on food and beverages will be cut from 8% to 1% for two years from April 2027, with cash handouts for low- and middle-income households to make the tax burden effectively zero. It is Japan's first consumption tax cut since 1989. The annual revenue shortfall is estimated at about 4.4 trillion yen, plus about 600 billion yen for cash handouts, to be covered without deficit bonds.
The eurozone's gross domestic product rose 1% year-on-year in the second quarter of 2026, according to the preliminary estimate. The prior quarter's growth rate was revised upward to 0.5% from an initial 0.3%. The data provides an early indication of the region's economic trend, with the revision showing a stronger-than-previously-reported performance in the first quarter.
The eurozone unemployment rate held at 6.3% in June 2026, matching the revised figure for the prior month. The previous month's reading was adjusted upward to 6.3% from an initially reported 6.2%, leaving the June rate unchanged from the revised May level.
The Ministry of Commerce completed its 2025 assessment of 228 national-level economic and technological development zones, covering their 2024 performance. The zones achieved a combined GDP of RMB 15.4 trillion, representing 11.4% of national GDP. Their tax revenue accounted for 25.8% of the tax revenue of their respective prefecture-level cities, up 1.1 percentage points from the prior year. As of end-2024, the zones hosted 1,096 listed companies, a year-on-year increase of 5.3%.
The August local government bond issuance plan has been disclosed at RMB 1.091 trillion, the highest monthly figure since 2026, surpassing March's RMB 981.5 billion. New special bonds account for RMB 586.1 billion, over half of new bond issuance. The pace of issuance remains slower than the same period in 2024, but the increased supply of new special bonds is expected to support economic stability. Sichuan, Guangdong, and Shandong each plan over RMB 100 billion in issuance.
The Shaanxi Provincial Development and Reform Commission on July 28 issued the implementation plan for the Xi'an metropolitan area during the 15th Five-Year Plan period. The plan aims for 75% of the population to have one-hour commute access by 2030, and R&D expenditure intensity to reach 4.5%. The metropolitan area, China's fifth national-level metropolitan area and the only one in the northwest, covers 20,600 square kilometers. As of 2025, its economic output stood at RMB 1.75 trillion, 1.3 times the initial planning target, accounting for 47.8% of Shaanxi's GDP.
The US Defense Department announced nearly $170 billion in spending to accelerate production of Patriot and THAAD missiles and nuclear submarines, addressing inventory depletion from the US-Iran war and the Russia-Ukraine conflict. Lockheed Martin secured a seven-year, $59 billion contract for Patriot missiles, expanding from a one-year $4.7 billion order in April 2026. The Pentagon also finalized an initial seven-year, $35 billion contract for THAAD interceptors, with the contracts including infrastructure upgrades for two shipyards. The multi-year agreements reflect a procurement reform launched in 2025.
Beijing's social financing increment reached 1,058.13 billion yuan in the first half of 2026, with corporate direct financing accounting for 69.1% of the total, up 16.3 percentage points year-on-year. RMB deposits stood at 32.33 trillion yuan at end-June, rising 13.2% from a year earlier. The weighted average lending rate on general loans fell 16 basis points to 3.27%, while the corporate loan rate dropped 21 basis points to 2.31%. Lending to technology-intensive sectors grew strongly, with technology loans among the highest nationally.
The Political Bureau of the CPC Central Committee met on July 30 to analyze the economic situation and deploy work for the second half of the year. It called for expanding international trade cooperation and vigorously developing service trade. According to Ministry of Commerce data, China's total service trade imports and exports reached 3.09948 trillion yuan in the first five months of 2026, up 6% year-on-year. Exports rose 15.9% to 1.23046 trillion yuan, while imports edged up 0.4% to 1.86902 trillion yuan, narrowing the deficit to 638.56 billion yuan. The 2025 full-year service trade totaled 8.08231 trillion yuan, up 7.4%.
China's Politburo on July 30 outlined second-half economic work, emphasizing adaptation to diverse consumption needs, expansion of quality supply, and tapping service consumption potential. Data shows 2025 services value added reached RMB 80.9 trillion, accounting for 57.7% of GDP, with services' contribution to economic growth rising to 61.4% from 55.1% in 2020. First-half 2025 retail sales grew 2.7% year-on-year, while service retail sales rose 5.3%. Officials pledged to boost supply in culture, tourism, sports, and promote integrated development to drive consumption. The outlook for consumption remains positive, supported by a large population, growing middle-income groups, and per capita GDP nearing high-income country levels.
In the first half of 2026, industrial enterprises above designated size in Liaoning Province achieved a total profit of 69.8 billion RMB, up 16.8% year-on-year. State-owned holding enterprises posted a profit of 15.65 billion RMB, up 72.7%; joint-stock enterprises reported 50.83 billion RMB, up 65.5%; foreign and Hong Kong, Macau, and Taiwan-invested enterprises saw a profit of 18.88 billion RMB, down 34.6%; and private enterprises recorded 12.71 billion RMB, up 19.0%.
China’s National Development and Reform Commission detailed progress on the 'Six Networks'—water, electricity, computing, communications, urban underground pipelines and logistics—and announced heightened multi-network coordination to boost effective investment and expand domestic demand. In 2026, over RMB7 trillion will be invested in these networks and key areas. During the 15th Five-Year Plan period, investment in new-type power grids and underground pipelines is projected at around RMB5 trillion each, and computing network direct investment will add RMB4 trillion. In the first half, private capital into water network construction exceeded RMB10.8 billion, up 85.8% year-on-year.
Net financing of interbank negotiable certificates of deposit (CDs) exceeded 1 trillion yuan in the past three months, with the one-year issuance rate for state-owned and joint-stock banks rising to 1.49%, up nearly 5 basis points this month. Core excess reserve ratios of banks were low in May and June 2026. After net repayment of about 1.4 trillion yuan from January to April, net issuance surged to over 900 billion yuan in May-June and over 180 billion yuan in July. The PBOC released draft rules on June 26 allowing dynamic adjustment of issuance quotas. Over 190 banks have disclosed 2026 CD issuance plans, with the six largest banks planning total issuance of 10.76 trillion yuan, little changed from 2025.
In 2025, China's 'three new' economy generated a value added of 25.79 trillion yuan, up 6.2% year-on-year at current prices, representing 18.39% of gross domestic product. The growth rate exceeded the overall GDP growth by 2.2 percentage points, and the share rose by 0.38 percentage points from the previous year.
China’s top leadership met on July 30 to set the economic course for the second half of 2026, stressing more proactive fiscal policy, moderately accommodative monetary settings, and stronger counter-cyclical adjustment. The Politburo called for accelerating fiscal expenditure and bond-fund use to expand domestic demand and improve supply. Second-quarter GDP growth eased to 4.3% from 5.0% in the first quarter. Broad fiscal space available in the second half exceeds RMB7 trillion, comprising RMB3.66 trillion from the deficit, RMB2.33 trillion from new special bonds, RMB728 billion from ultra-long-term special bonds and RMB300 billion from capital-injection bonds. New policy financial instruments total RMB800 billion, up RMB300 billion from 2025, with funds to be deployed mainly in the second half.
The Politburo met on July 30 to set H2 economic policy, calling for more proactive fiscal and moderately loose monetary policies to accelerate the shift from old to new growth drivers. China's Q2 GDP grew 4.3% in real terms and 5.9% nominally, with the GDP deflator turning positive after 12 quarters. First-half general public budget expenditure reached RMB 14.33 trillion, up 1.5% year-on-year. Export growth in the first half stood at 17.6% in dollar terms, exceeding the 5.5% pace in 2025.
In the first half of 2026, Fujian province’s social financing aggregate increased by 580.04 billion RMB. As of end-June, outstanding loans from financial institutions in local and foreign currencies reached 9.1 trillion RMB, up 2.9% year-on-year, while outstanding deposits totaled 9.6 trillion RMB, up 7.8% year-on-year.
HSBC has kept its Hong Kong dollar prime rate unchanged at 5% following the Federal Reserve's decision to hold interest rates steady. The bank also maintained its savings deposit rate, offering 0.001% per annum for balances of 5,000 Hong Kong dollars or more and zero interest for balances below that threshold. Additionally, the extra rate for comprehensive wealth management customers with total assets of 1 million Hong Kong dollars or more remains at 0.001%.
Hefei's state capital sustained a 36.6 billion yuan loss over a decade to nurture BOE, ChangXin Memory Technologies (CXMT), and NIO, driving the city's integrated circuit output value from 18 billion yuan to 151.4 billion yuan and fostering over 400 chip companies. The strategy exemplifies a three-layer innovation chain—basic research, market-driven tech iteration, and industrial scaling—that Hefei, Shenzhen, and Suzhou have leveraged, contrasting with cities like Xi'an and Wuhan that struggle with commercialization.
A group of US senators has written to Apple demanding it abandon plans to use storage chips from Chinese suppliers ChangXin Memory Technologies and Yangtze Memory Technologies, even for products sold only in China. The letter, led by Senators Jim Banks and Chuck Schumer, gives Apple an August 21 deadline to commit. The push follows Micron's lobbying against the move and comes amid a global memory shortage that has driven price increases.
In the first half of 2026, China's above-designated-size cultural and related enterprises reported revenue of RMB 7.2026 trillion, a year-on-year increase of 4.6% on a comparable basis. Revenue from 16 sub-sectors with distinct cultural new business forms reached RMB 3.5239 trillion, up 9.6%, outpacing the overall growth by 5.0 percentage points. However, total profit fell 7.5% to RMB 574.7 billion, with an operating profit margin of 7.98%, down 1.04 percentage points from a year earlier.