Economy/Resources - 3. page

China is accelerating the digital transformation of its tax administration while significantly expanding recruitment within the tax system, highlighting efforts to strengthen revenue collection amid mounting fiscal pressures on local governments. According to individuals familiar with the system, the issue is not simply declining revenue but a structural shift in local government finances. As land-sale income continues to shrink, local authorities are increasingly relying on tax audits, back-tax collections, administrative fines, and other non-tax revenues to fill budget gaps.

The tax system has become an exception to the broader reduction in civil service hiring. Of the 38,119 positions planned for China’s 2026 national civil service recruitment, 25,004—or 65.6 percent—are allocated to the tax administration, up from about 23,000 positions, or 58 percent of total recruitment, in 2025. Meanwhile, tax authorities report that AI, big data, and blockchain technologies have been largely integrated into a nationwide “smart tax” system, increasing average tax revenue collected per employee from RMB 27 million (US$4 million) in 2021 to RMB 45 million (US$6.6 million), a 66.7 percent increase.

The enhanced enforcement has coincided with a wave of back-tax collections. Since early June, more than a dozen A-share listed companies have announced tax reassessments and late-payment penalties totaling approximately RMB 485 million (US$71 million) across sectors including electronics, chemicals, pharmaceuticals, environmental services, and packaging. In May, 14 listed companies also disclosed additional tax payments and penalties exceeding RMB 2 billion (US$290 million).

Tax enforcement has also expanded to individuals. China’s State Taxation Administration reported that personal income tax revenue rose 12 percent year-on-year to RMB 764.4 billion (US$112 billion) during the first five months of 2026, while taxpayers paid RMB 13 billion in back taxes on overseas income during the same period. Reports also indicate that authorities in several provinces have begun requiring high-net-worth individuals to disclose offshore trust holdings, with some cases resulting in additional tax assessments and penalties. Source: Epoch Times, June 12, 2026
https://www.epochtimes.com/gb/26/6/11/n14786670.htm

An analysis citing International Energy Agency (IEA) data argues that China’s AI and data center industries remain heavily dependent on coal despite Beijing’s claim of “green computing” and “low-carbon AI.” According to the analysis, coal-fired power supplied nearly 70 percent of the electricity consumed by China’s AI and data centers in 2025, compared with roughly 20 percent from renewable energy and about 10 percent from nuclear power.

The analysis contends that although China has rapidly expanded renewable energy capacity, large-scale data centers still rely on coal-fired power to provide the stable, around-the-clock electricity required for AI model training and cloud computing. Under current technological conditions, intermittent energy sources such as wind and solar cannot reliably meet these continuous power demands without conventional baseload generation.

The article concludes that China’s claims of a “green computing revolution” should be assessed against the actual energy sources powering its AI infrastructure, which, in the foreseeable future, will continue to be coal-fired electricity.

Source: Aboluo, June 25, 2026
https://hk.aboluowang.com/2026/0625/2399947.html

China’s Supreme People’s Court warned on Friday June 25 that the country’s drug abuse landscape has undergone a significant structural shift in recent years, with etomidate now surpassing heroin in prevalence, and young people increasingly becoming the primary group abusing new types of drugs, according to China’s state media.

The disclosure was made at a press conference themed “Punishing New Drug Crimes According to Law and Preventing Drug Abuse Among Minors,” where Liu Weibo, head of the court’s Fifth Criminal Division, stated that while China’s overall drug situation has continued to improve, it remains complex and volatile. A clear trend has emerged: offenders are getting younger, and minors are now the main demographic abusing new psychoactive substances and unscheduled addictive compounds.

Liu noted that the number of minors involved in drug-related cases dropped 32 percent year-on-year in 2025, with the decline continuing through May 2026, reflecting some progress in curbing youth drug abuse. However, compared to 2023, the number of cases and individuals involved rose approximately 1.8 times in 2025, and the substitution abuse of unscheduled addictive substances has become increasingly prominent during the same period.

Authorities identified dozens of substances currently being abused in China. Among those with no medical use, so-called “zombie vape” cartridges have emerged as the leading vehicle for minor drug abuse, with etomidate as the primary additive. Among medically licensed narcotics and psychotropics, dextromethorphan is the most common. Nitrous oxide dominates among unscheduled addictive substances.

Officials also highlighted that drugs are being disguised in everyday products such as milk tea, chocolate, and e-cigarettes, or marketed with claims of weight loss, stimulation, or sexual enhancement — with some even implicitly promoted for use as date rape drugs.

Source: Central News Agency (Taiwan), June 25, 2026
https://www.cna.com.tw/news/acn/202606250337.aspx

An individual identified as being close to China’s Ministry of Commerce told The Epoch Times that foreign capital continues to leave China, while a significant portion of newly reported foreign investment consists of Chinese companies registering entities overseas and then reinvesting in China as “foreign” capital.

The source claimed that foreign capital outflows over the past several months were approximately 30 percent higher than during the same period last year—the sharpest increase in five years. According to the source, China’s top leadership has become increasingly concerned and has tasked Vice Premier He Lifeng with leading efforts to stabilize foreign investment, with particular emphasis on retaining German investment while avoiding trade frictions with Europe and the United States. Officials are also reportedly seeking to reassure U.S. and South Korean investors.

A policy package overseen by He reportedly identifies cross-border mergers and acquisitions, cross-border data transfers, and the reinvestment of corporate profits as priority areas for reform. The package reflects Beijing’s recognition that these issues remain among the principal concerns of foreign companies operating in China.

Source: Epoch Times, June 24, 2026
https://www.epochtimes.com/gb/26/6/23/n14794650.htm

Amid a prolonged property market downturn and slowing economic growth, Beijing is once again turning to government-led infrastructure investment to stimulate the economy. After years of large-scale spending on highways, high-speed rail, and airports, government is shifting its focus underground. Upgrading urban utility networks has been identified as a key infrastructure initiative for 2026—the first year of China’s 15th Five-Year Plan (2026–2030)—with planned investment exceeding RMB 5 trillion (US$700 billion).

According to the draft “Urban Renewal 15th Five-Year Plan,” China aims to build or renovate approximately 770,000 kilometers of underground utility networks during the plan period, including natural gas, water supply, wastewater, drainage, and district heating pipelines. To support the initiative, the central government has allocated RMB 160 billion in ultra-long-term special treasury bonds for 2026—RMB 25 billion more than the previous year—with funding earmarked for underground pipeline projects.

Beijing views the initiative as both an economic stimulus and a long-term urban modernization strategy. Officials estimate the program could generate RMB 7.5–10 trillion in economic output by boosting demand for construction materials, equipment manufacturing, and smart infrastructure services, while supporting approximately 2.8 million jobs annually. The project is also intended to strengthen urban resilience, expand the use of underground space, and advance China’s green and low-carbon development objectives. Source: Xinhua, June 17, 2026
https://www.news.cn/politics/20260617/7f81574d81d6426888124259dfc30598/c.html

In the first half of 2026, 37 equity transactions involving renewable energy companies were completed in China, with a combined asking price of 1.17 billion yuan (US$163 million). Major state-owned enterprises (SOEs), including State Grid, China Southern Power Grid, China Three Gorges Corporation, CGN, PowerChina, Energy China, China State Shipbuilding Corporation, and SDIC Power, participated in the divestments. Approximately 65 percent of the sellers were state-owned entities, while 60 percent of the transactions involved transfers of controlling stakes.

Several deals drew attention for their exceptionally low valuations. In some cases, SOEs transferred substantial stakes in renewable energy subsidiaries for nominal prices, including multiple transactions listed at just 1 yuan (US$ 0.15). Most of the assets involved small-scale distributed solar and decentralized wind projects, which often face high operating costs and limited economies of scale. The prevalence of full exits and controlling-stake transfers suggests a broader effort by SOEs to streamline portfolios and shed underperforming assets.

Analysts attribute the divestment wave to three factors. First, Beijing has continued to push central SOEs to dispose of non-core businesses and low-efficiency assets. Second, market conditions have become increasingly challenging. Rapid capacity expansion, solar-sector oversupply, falling equipment prices, and the phaseout of subsidies have compressed returns, with some projects reportedly falling below SOEs’ investment thresholds.

However, the article claimed the asset sales reflect a strategic reallocation of capital rather than a retreat from renewable energy. Chinese SOEs are increasingly directing investment toward large-scale clean energy bases, grid infrastructure, and emerging sectors such as green power and hydrogen energy.

Source: Sina, June 16, 2026
https://finance.sina.com.cn/roll/2026-06-16/doc-inicrivk6098566.shtml