Material economic data, monetary and fiscal policy, regulation and cross-border macro developments.
As of end-June 2026, RMB real estate loans outstanding stood at 50.74 trillion yuan, down 4.9% year-on-year, with a net reduction of 1.23 trillion yuan in the first half. Development loans fell 8.5% to 12.65 trillion yuan, decreasing by 540.2 billion yuan, while personal housing loans dropped 3.8% to 36.29 trillion yuan, down 716.3 billion yuan.
As of end-June 2026, China's industrial medium- and long-term loans stood at RMB 27.81 trillion, up 5.9% year on year, with an increase of RMB 1.21 trillion in the first half. Total RMB loans across all sectors reached RMB 282.63 trillion, up 5.2% year on year. Heavy industry loans grew 4.9% to RMB 23.45 trillion, while light industry loans rose 11.3% to RMB 4.36 trillion.
The Hong Kong Monetary Authority announced on July 28 that the Exchange Fund recorded an investment income of HK$134.7 billion in the first half of 2026. Key components included HK$49.1 billion from bond investments, a HK$11.8 billion loss from Hong Kong equities, HK$53.7 billion from other equity investments, a HK$34.3 billion foreign exchange gain on non-HKD assets, and HK$9.4 billion from other investments.
The Hong Kong Monetary Authority (HKMA) has reported that the Exchange Fund's investment income for the first half of the year reached RMB 134.7 billion. The figure, which represents the fund's earnings from its investment portfolio during the six-month period, was announced by the HKMA in a statement.
China's Ministry of Finance and State Taxation Administration have adjusted urban land use tax rules for energy and resource enterprises. From September 1, 2026, certain lands used by oil, gas, coal, power, and mining enterprises will be exempt from the tax. Concurrently, from September 1, 2026 to August 31, 2027, lands that previously qualified for tax reductions will be taxed at half the due amount, and from September 1, 2027, full tax will apply, with the old reduction rules being abolished.
Berkeley Earth climate scientist Zeke Hausfather warned on July 23 that the strongest El Niño in 150 years is forming. Since June, Pacific sea surface warming and wind patterns have intensified rapidly. Fourteen climate models predict a median peak sea surface temperature 0.8 degrees Celsius higher than the 2015-2016 record. The previous strong El Niño in 1997-1998 caused $5.7 trillion in global economic losses. The short two-year interval since the last event raises questions about whether human-caused climate change is shifting the ENSO cycle.
China's Ministry of Commerce and eight other departments jointly issued 17 measures across six areas to boost auto aftermarket consumption. With 370 million vehicles on the road, the aftermarket covers maintenance, repairs, parts, modification, RV camping, motorsports, used-car trading, and scrapping. The modification market is valued at about 160 billion yuan. Measures include standardizing vehicle modification, with 16 legal items now open, and 61.7% of models at the Beijing auto show being modification-related. RV camping policies target passage, landing, and supporting services.
Prime Minister Sanae Takaichi's statement that there were no particular points of reflection on the operation of the special Diet session drew criticism from opposition parties on the 28th. Yuichiro Tamaki of the Democratic Party for the People questioned the gap in perception and noted the failure to pass the fiscal 2026 budget within the previous fiscal year. Renho of the Constitutional Democratic Party criticized the Prime Minister for not attending the budget committee, delaying party leader discussions, and forcing through the Imperial Household Law revision without public consensus. She also highlighted the government's slow response to rising prices and disregard for money politics issues.
As of end-June 2026, the bank wealth management market had RMB 33.66 trillion in outstanding products, up 1.11% from the start of the year and 9.75% year-on-year. There were 51,200 products, up 10.58% from the start. New products raised RMB 39.21 trillion. Investors earned RMB 305.2 billion, with an average annualized return of 2.05%. Wealth management subsidiaries held 92.63% of the market, with their scale up 13.46% year-on-year.
Guangdong's AI core industry scale surpassed RMB 300 billion by end of 2025, a year-on-year increase of over 40%, representing one quarter of the national total. Applications span smart manufacturing at TCL, Haitian Weiye's aroma detection, and Mouldpro's dual-line automation. Production efficiency gains include 99.8% quality pass rate, 30% shorter lead times, and 47% lower water and electricity costs in agriculture. The province issued an AI action plan in April 2025.
The Trump administration is advancing a regulatory framework that would require companies including OpenAI, Anthropic, and Google to submit their most advanced AI models for a 30-day government review before public release. Derived from an executive order signed in early June, the framework is due by August 1. It aims to establish a standardized process for reviewing powerful AI models, particularly those capable of rapidly identifying cybersecurity vulnerabilities. Key disagreements include the definition of frontier models and whether open-source models should be exempt. The administration insists compliance is voluntary, but its credibility is questioned after imposing export controls on Anthropic.
Yuichiro Tamaki has announced a party study session on the 29th to discuss revising a bill that regulates pornographic advertisements. The bill requires large digital platforms to take measures against ads harmful to youth and imposes a duty of effort for ads containing 'quasi-harmful information'. Tamaki said the session, with the Legal Affairs Bureau, will examine the bill's purpose and provisions, and consider amendments. He stressed the importance of balancing regulation with freedom of expression.
Yuki Tomio, a Japanese folklorist known for advocating the 'Jimonogaku' (local resource learning) approach, died on July 20, 2026, at the age of 80. He visited some 600 villages across Japan, promoting the idea of leveraging local assets over seeking external ones. He received the 2004 Art Encouragement Prize from the Minister of Education for his regional development work, including projects linking urban and rural areas through food. He was born in September 1945 during the evacuation from Manchuria.
Eiji Bando, a former professional baseball pitcher for the Chunichi Dragons and later a celebrated actor, died of chronic heart failure on July 22, 2026, at age 86. His family held a private funeral per his wishes. Bando, born in 1940 in former Manchuria, led his high school to the Summer Koshien finals in 1958 and played 11 seasons in Japan's Central League, earning three All-Star selections. After retiring, he became a popular entertainer and won the Japan Academy Prize for Best Supporting Actor for the 1990 film 'A-Un.'
On the morning of 28th, a train collided with a light car at a crossing on the JR Senmo Line in Hokkaido. The crossing had no barriers or alarms. The train carried 48 passengers and the car driver, a man in his 60s, were uninjured. The same crossing had a similar accident in September 2024. Service was suspended for about 4 hours before resuming.
Tiphaine Belon, a 36-year-old French woman, has been missing for eight years since she disappeared in Nikko, Tochigi Prefecture, in 2018. On the anniversary, police distributed multilingual flyers near Nikko Station, joined by her mother Anne Dezel, 67. Despite 245 tips received, no effective leads have emerged, and the number of informants is declining.
On July 28, 2026, Shenwan Hongyuan Securities Chairman Liu Jian spoke at the Science and Technology Innovation Industry Integration and Development Conference in Shanghai. He highlighted the firm's investments in Wu Wenxinqiong and Xijing Technology, and its support for Anji Technology's convertible bond refinancing on the STAR Market and Zhida Technology's Hong Kong IPO. The firm also deepened its research, investment, and investment banking integration, establishing industry research and launching service stations in 2025.
Tax data in the first half of 2026 reflected a strengthening economy, with active business entities up 20.2% and tax revenue exceeding 10 trillion yuan, a 4.9% increase. Industrial sales rose 7.1%, and equipment investment surged 9.8%. High-tech and clean energy sectors registered strong growth. Personal income tax rose 13% to become the third-largest tax, with over 100 million taxpayers obtaining refunds exceeding 150 billion yuan. The tax bureau's crackdown on 'invoice economy' caused related invoices to fall 37.7%, and tax content per 100 yuan of invoices rose 13.7%. VAT revenue hit 3.87 trillion yuan, up 6%, as new general taxpayers jumped 25.2%. Smart tax services covered 85% of matters, cutting processing times by 20%; departure tourist refunds soared 366%.
China's individual income tax (IIT) revenue reached RMB 900 billion in the first half of 2026, up 13% year-on-year, driven by capital gains, strong industry performance, and enhanced tax compliance. The top 1% of earners contributed over half of total IIT, while the top 10% accounted for about 90%. The government also announced a new tax on offshore trusts to curb avoidance by the wealthy.
Rong Hailou of China's State Taxation Administration announced that the Regulation on Tax-Related Information Reporting by Internet Platform Enterprises, effective June 20 last year, has driven significant compliance. In the first quarter of this year, 9,692 platforms submitted tax data, up 39% from the initial reporting in October 2025. Tax-paying merchants increased 37% from before the rule, and 70% of platforms filed by April 20. Authorities also uncovered a case involving 12,000 accounts used for fake orders, generating illegal gains of RMB 1.8 million.
US Customs officials conducted on-site inspections at Chinese-invested factories in Vietnam, reviewing documents and production processes, but found no direct evidence of illegal transshipment of Chinese goods. Vietnam's government, under President To Lam, stepped up enforcement after being named a key country for intellectual property allegations, seizing 50,000 pairs of counterfeit Nike shoes. In a 3,581-page submission, Vietnam highlighted nearly 20,000 infringement cases handled from 2021 to 2025. Meanwhile, US-Vietnam trade talks to implement a framework agreement remain inconclusive as the two sides failed to reach consensus on transshipment and other non-tariff barriers.
The State Taxation Administration announced that over 100 million taxpayers have received tax refunds, with the total amount exceeding RMB 150 billion. The data, released by the authority, indicates the substantial number of beneficiaries and the high value of refunds distributed under the policy.
In the first half of 2026, China's tax authorities collected 16.7 trillion yuan in tax and fee revenue, with tax revenue (excluding customs-levied import taxes and export rebates) exceeding 10 trillion yuan, up 4.9% year-on-year. Tax cuts and refunds supporting innovation and manufacturing released 1.91 trillion yuan. High-tech industry sales rose 15%, digital economy core industry sales increased 8.7%, and active business entities grew 20.2%. The tax authorities recovered 180.6 billion yuan from tax violations, up 20.8%.
The 2025 annual individual income tax settlement concluded on June 30, with over 200 million taxpayers completing filings, up 4.38% year-on-year. More than 100 million applied for tax rebates, and total refunds exceeded RMB 150 billion. Over 70% of taxpayers owed no tax after settlement, while among those who paid tax, more than 60% were subject to a 3% rate.
In the first half of 2026, China's tax authorities recovered RMB 180.6 billion in tax losses, up 20.8% year-on-year. Enforcement actions included penalties for over 3,200 enterprises for improper tax benefits, 32,400 for false invoicing, and 500 illegal intermediaries. The crackdown on the "invoice economy" reduced invoice amounts by 37.7% and raised tax content per invoice by 13.7%. A total of 1.29 million shell companies were identified, with nearly 700,000 deregistered. Internet platform tax reporting achieved near full coverage, with 9,692 platforms reporting in Q1 2026, up 39% from October 2025, and reporting timeliness improved.
The National Development and Reform Commission announced that as of July 2026, the China-Europe Railway Express had made over 130,000 cumulative trips, carrying goods valued at more than US$520 billion. The heavy container rate has remained at 100% for 46 consecutive months, and the ratio of return to outbound trips is near 1:1. During the 15th Five-Year Plan period, China will improve multimodal transport coordination, expand resilient corridors, and deepen infrastructure connectivity with partner countries.
China's national student loan program has disbursed a cumulative 695.8 billion RMB by the end of 2025, benefiting over 30 million students, according to a Ministry of Education press conference on July 28. The program operates with a dual-track model of home-origin loans as the main channel and campus loans as a supplement. Since 2012, the maximum loan amount has been raised four times, from an initial 6,000 RMB per year to the current 20,000 RMB for undergraduates and 25,000 RMB for graduate students.
The State Taxation Administration reported that cross-province electronic tax payments exceeded RMB 130 billion in the first half of 2024, up 39% year-on-year. Deputy Director Wang Daoshu said on July 28 that the agency streamlined cross-region tax procedures, reducing average processing time by 5 to 10 days, with eligible cases settled the same day. The move aims to facilitate the cross-regional flow of production factors.
Japanese Prime Minister Sanae Takaichi announced plans to reduce the consumption tax on food and beverages from 8% to 1% for two years starting April 2027. The government will proceed despite a cross-party panel failing to reach consensus on funding and permanence. Cash subsidies for eligible households, costing about 600 billion yen annually, will begin as early as autumn 2027. The 1% rate was chosen over 0% to ease the burden on retailers reprogramming cash registers.
State Taxation Administration head Hu Jinglin announced on July 28 that welfare tax incentives in the first half covering pensions, medical care, and education drove a year-on-year increase of 11.8% in tax reductions. A total of 126 million people benefited from special deductions for personal income tax, up 5.9% from a year earlier, while the tax reduction amount exceeded RMB 320 billion, representing an 8.2% year-on-year increase.