Sinobravo Policy Express (August 2025)

Editor's note:

In July, data released by the National Bureau of Statistics showed that the service sector maintained robust growth, with the production index rising 5.8% year-on-year. Industrial production also expanded at a steady pace, with value-added output increasing 5.7% year-on-year. Total retail sales of consumer goods reached 28.4238 trillion yuan, marking a 3.7% year-on-year increase. Fixed-asset investment continued to expand, growing 1.6% year-on-year. Goods imports and exports rose 6.7%, while the trade structure continued to improve. The urban surveyed unemployment rate stood at 5.2%. The consumer price index remained flat year-on-year, while the producer price index continued to decline. Overall, the national economy maintained a stable and progressive development trajectory. The foundational role of consumption in economic development has gradually strengthened, with consumption structure continuously upgrading and transforming. Consumption patterns are shifting from a primary focus on goods to a balanced emphasis on both goods and services, becoming a prominent driver and key lever for boosting consumption.

On August 12, the Ministry of Finance jointly released policies for subsidizing personal consumption loans and loans to service industry operators. The supported sectors include eight categories of consumption: catering and accommodation, health, elderly care, childcare, domestic services, cultural entertainment, tourism, and sports. Most of these fall under the category of service consumption. Through the coordination of fiscal and financial policies, these measures support consumption promotion and domestic demand expansion from both the supply and demand sides. Service consumption is closely tied to people's daily lives, directly impacting their sense of happiness and fulfillment. Under policy guidance and coordinated efforts, the supply of service consumption continues to expand while innovative consumption scenarios emerge constantly. This is expected to meet residents' aspirations for a better life in multiple dimensions, further unleash consumption potential, and propel service consumption to become a key engine for boosting consumption both now and in the future.

Economic operation

• On August 15, the National Bureau of Statistics released China's economic performance data for July, showing positive trends across multiple indicators as the national economy maintained steady progress:

• Industrial production grew at a robust pace: In July, the value-added output of large-scale industrial enterprises nationwide increased by 5.7% year-on-year and 0.38% month-on-month, with equipment manufacturing and high-tech manufacturing performing well.

• Service sector expanded rapidly: The national service production index rose by 5.8% year-on-year in July.

• Market sales continued to expand: Total retail sales of consumer goods grew by 3.7% year-on-year;

• Fixed-asset investment continued to expand, with manufacturing investment growing rapidly: From January to July, national fixed-asset investment reached 28.8229 trillion yuan, up 1.6% year-on-year. Investment in high-tech industries—specifically aerospace equipment manufacturing, information services, and computer/office equipment manufacturing—increased by 33.9%, 32.8%, and 16.0% respectively compared to the same period last year; Private investment decreased by 1.5% year-on-year;

• Growth in goods imports and exports accelerated, with trade structure continuing to optimize: In July, total goods imports and exports reached 3.9102 trillion yuan, up 6.7% year-on-year. Exports amounted to 2.3077 trillion yuan, increasing by 8.0%, while imports reached 1.6026 trillion yuan, rising by 4.8%. The trade surplus stood at 705.1 billion yuan;

• Consumer prices remained stable year-on-year: In July, the national Consumer Price Index (CPI) held steady year-on-year; the Producer Price Index (PPI) fell 3.6% year-on-year, while the Purchase Price Index dropped 4.5% year-on-year;

• The employment situation remained generally stable: From January to July, the average surveyed urban unemployment rate nationwide was 5.2%. In July, the surveyed urban unemployment rate stood at 5.2%.

Policy environment
High-level Interaction

• On August 26, President Xi Jinping met with Vyacheslav Volodin, Chairman of the State Duma of the Russian Federation. Xi emphasized that cooperation between legislative bodies is an indispensable component of the China-Russia comprehensive strategic partnership of coordination for a new era. He expressed hope that both sides would actively exchange experiences in state governance and legislation, providing more solid legislative safeguards for strategic coordination and cooperation across all fields under new circumstances.

• On August 12, President Xi Jinping held a telephone conversation with Brazilian President Lula at the latter's request. Xi stated that China supports the Brazilian people in defending their national sovereignty and upholding their legitimate rights and interests. Countries should unite to clearly oppose unilateralism and protectionism.

• On August 8, President Xi Jinping held a telephone conversation with Russian President Vladimir Putin. The two heads of state positively assessed the high level of political mutual trust and strategic coordination between China and Russia, and agreed to jointly promote greater development in bilateral relations.

• On August 26, Minister of Commerce Wang Wentao met with South Korean Presidential Special Envoy Park Byeong-seok. Wang Wentao stated that China is South Korea's largest trading partner, while South Korea is China's second-largest trading partner. Economic and trade cooperation plays a “ballast” role in bilateral relations. China is willing to work with South Korea to implement the important consensus reached by the leaders of both countries, maintain the stability and smooth operation of industrial and supply chains, accelerate the second-phase negotiations of the China-South Korea Free Trade Agreement, and explore cooperation potential in new industries and fields.

• On August 19, Vice Minister of Commerce and Deputy Representative for International Trade Negotiations Ling Ji convened a roundtable meeting with foreign-invested enterprises in the Pearl River Delta region. Ling Ji emphasized ensuring national treatment for foreign-invested enterprises, enabling their equal participation in standard-setting, and strengthening intellectual property protection. He expressed hope that foreign-invested enterprises would continue to deepen their commitment to China, increase their R&D efforts in the country, and play a positive role in the stability and development of global industrial and supply chains.

• On August 14, Vice Minister of Commerce and Deputy Representative for International Trade Negotiations Ling Ji met with David Levy, Chief Executive Officer of Global Partnerships at Canada's Brookfield Asset Management. Ling Ji emphasized efforts to enhance the level of cross-border trade and investment facilitation. He welcomed Brookfield's establishment of a renewable energy fund in China and its commitment to long-term investment in China's market, particularly in green sectors.

China's Outward Direct Investment (ODI)

• State Financial Regulatory Administration:Revised and finalized the “Administrative Measures for Commercial Bank M&A Loans (Draft for Comment)” and solicited public feedback. These measures support domestic M&A entities in achieving actual control, mergers, or equity participation in target enterprises or assets through acquiring existing equity, subscribing to new equity, purchasing assets, or assuming debts. They aim to optimize commercial banks' M&A loan services, thereby advancing the development of a modern industrial system and new productive forces.Issued the “Several Measures on Banking and Insurance Support for Fujian's Development as a Cross-Strait Integration Demonstration Zone” to enhance banking and insurance sector support for cross-strait integration. Encourages banking and insurance institutions and branches within Fujian to continuously improve the quality and efficiency of financial services for Taiwan.

• Anhui: The Provincial Development and Reform Commission jointly issued the “Several Measures on Further Promoting the Development of County-Level Characteristic Industrial Clusters,” proposing to support eligible clusters in advancing “industrial belt + cross-border e-commerce” development and launching China-Europe “customized freight trains” to enhance their openness capabilities. Support comprehensive foreign trade service platforms in providing public foreign trade services to SMEs within clusters. Encourage enterprises to utilize new business models such as cross-border e-commerce and market procurement trade to expand into international markets.

• Tianjin: The municipal government issued the Implementation Plan for Promoting Digital Trade Innovation in Tianjin, aiming to increase the proportion of digitally deliverable services in the city's total service trade to over 45% by 2029. The plan seeks to further expand cross-border e-commerce transaction volumes and their share of total goods trade, improve digital trade infrastructure, elevate openness in the digital sector, and strengthen alignment with international high-standard trade rules.

Foreign Direct Investment (FDI)

• State Council: Issued the “Decision on Amending the Regulations of the People's Republic of China on the Entry and Exit of Foreigners,” standardizing the issuance of visas and the services and management of foreigners' stays and residence within China. 

• General Administration of Customs: Issued the “Administrative Provisions on Direct Release of Imported Goods in Hainan Free Trade Port” to standardize customs management of directly released imported goods. Bonded goods and “zero-tariff” goods entering Hainan Free Trade Port directly through its open ports, which are not subject to licensing requirements or mandatory inspection and quarantine, may opt for direct release.

• State Administration of Foreign Exchange: Decided to launch pilot programs for green foreign debt operations in 16 provinces and municipalities including Shanghai, Beijing, Tianjin, Hebei, Jiangsu, Zhejiang, Anhui, Fujian, Shandong, Hubei, Guangdong, Sichuan, Ningbo, Xiamen, Qingdao, and Shenzhen. This initiative encourages non-financial enterprises to use cross-border financing for green or low-carbon transition projects. For domestic non-financial enterprises raising RMB or foreign currency funds from non-residents specifically for green or low-carbon transition projects meeting relevant conditions set by the People's Bank of China and other authorities, such projects will be allowed to occupy a smaller portion of the enterprise's total cross-border financing risk-weighted balance. This will expand the upper limit of cross-border financing for enterprises investing in green development or low-carbon transition projects.

• National Immigration Administration: Issued the “Shanghai Oriental Hub International Business Cooperation Zone Access Management Regulations (Interim)”, stipulating that foreign nationals entering the business cooperation zone via Pudong International Airport on international (regional) flights primarily for business exchanges, international exhibitions, or international training activities must be registered by the inviting institution through the zone's integrated information management service platform at least 48 hours in advance with the zone's comprehensive management authority. This aims to maintain orderly access management within the Shanghai Oriental Hub International Business Cooperation Zone and support its development.

• Sichuan: The Provincial Economic Cooperation Bureau jointly issued the “Implementation Plan for Sichuan Province's 2025 Foreign Investment Stabilization Action,” proposing 19 measures to advance high-level opening-up, enhance foreign investment promotion, strengthen open platform efficiency, and increase service guarantees for foreign investors. These efforts seek to further stabilize foreign investment expectations and attract more high-quality foreign investment projects.

• Guangdong: The Guangzhou Municipal Government jointly issued the “Implementation Plan for Opinions on Financial Support for Guangzhou Nansha's Deepened Comprehensive Cooperation with the Guangdong-Hong Kong-Macao Greater Bay Area,” intensifying financial backing for Nansha's development. This aims to strengthen Nansha's role as a driving force for high-quality development in the Guangdong-Hong Kong-Macao Greater Bay Area, positioning it as a pilot demonstration window for China's financial sector opening-up, a hub for financial innovation functions, and a key node in the Greater Bay Area's international financial network.

• Hainan:The 19th Session of the Standing Committee of the Seventh People's Congress adopted and promulgated the “Hainan Free Trade Port Foreign Investment Regulations,” aiming to promote foreign investment, protect investor rights, optimize investment services, and advance higher-level opening-up of the Hainan Free Trade Port.The Provincial Market Regulation Administration released the Chinese-English version of the “Hainan Provincial Guide for Registration of Foreign-Invested Companies,” continuously optimizing measures to facilitate the registration of foreign-invested enterprises and creating a more open, efficient, and convenient investment environment. This guide helps investors fully understand relevant policies for registering foreign-invested companies, enhancing their experience and satisfaction.

Taxation

• State Council Customs Tariff Commission: Issued the “Announcement on Adjusting Additional Tariff Measures on Imported Goods Originating from the United States,” continuing to suspend the 24% additional tariff rate on U.S. imports for 90 days while retaining the 10% additional tariff rate. This move facilitates the achievement of both parties' respective development goals and promotes global economic growth and stability.

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• Ministry of Finance:Issued the “Announcement on VAT Policies for Interest Income from Treasury Bonds and Other Bonds.” Effective August 8, 2025, VAT will resume collection on interest income from newly issued treasury bonds, local government bonds, and financial bonds issued on or after that date. Interest income from government bonds, local government bonds, and financial bonds issued before that date (including portions issued after August 8, 2025) will continue to be exempt from VAT until the bonds mature.Jointly issued the “Announcement on Clarifying VAT Policies for Express Delivery Services,” stipulating that income earned by express delivery companies from providing express delivery services shall be subject to VAT under the “collection and delivery services” category.Issued the Announcement on Individual Income Tax Policies Concerning Childcare Subsidies, exempting childcare subsidies distributed in accordance with the childcare subsidy system from individual income tax.Jointly issued the Announcement on Improving the VAT End-of-Period Carryforward Refund Policy. Starting from the September 2025 VAT filing period, taxpayers in the “manufacturing,” “scientific research and technical services,” “software and information technology services,” and “ecological protection and environmental management” sectors may apply monthly to the competent tax authority for refunds of end-of-period carryforward tax credits.

• Ministry of Industry and Information Technology: Issued the “Notice on Formulating the 2025 List of Industrial Mother Machine Enterprises Eligible for the Value-Added Tax Additional Deduction Policy,” directing the preparation of the 2025 list of industrial mother machine enterprises eligible for the additional deduction policy. 

• State Taxation Administration: Released the “Implementing Regulations of the Value-Added Tax Law of the People's Republic of China (Draft for Comment)” for public consultation. This document further details and clarifies relevant provisions of the VAT Law, specifies matters authorized by the State Council, enhances the certainty and operability of the tax system, establishes a coordinated VAT framework, ensures the smooth implementation of the VAT Law, and better upholds the principle of taxation by statute.

• Hainan:The Provincial Taxation Bureau issued the Announcement on Issues Concerning the Continuation of Corporate Income Tax Preferential Policies for Hainan Free Trade Port. It addresses three key areas:

  - Reduced 15% corporate income tax rate for enterprises in encouraged industries;

  - Corporate income tax exemption for income from new overseas direct investments by enterprises in tourism, modern services, and high-tech industries;

  - One-time deduction or accelerated depreciation and amortization for newly acquired assets. This clarifies specific implementation guidelines and tax administration requirements for relevant policies to ensure their effective execution.

  The Provincial Government issued the “Management Measures for the List of High-End and Shortage Talents Eligible for Individual Income Tax Preferential Policies in the Hainan Free Trade Port,” establishing a list-based management system for high-end and shortage talents working in the Hainan Free Trade Port who enjoy preferential policies. The portion of their actual individual income tax burden exceeding 15% is exempted.

• Xinjiang: The Xinjiang Uygur Autonomous Region Taxation Bureau released the “Implementation Measures for Vehicle and Vessel Tax in Xinjiang Uygur Autonomous Region (Draft for Comment)” and solicited public feedback. It proposes that, except for vehicles and vessels exempted by laws and administrative regulations, public transportation vehicles and vessels, as well as motorcycles, tricycles, and low-speed cargo vehicles owned by rural residents and primarily used in rural areas, shall be temporarily exempted from vehicle and vessel tax in the region. This further standardizes the collection and management of vehicle and vessel tax.

• Tianjin: The Municipal Taxation Bureau released the “Provisions on Exempting Public Transportation Vehicles from Vehicle and Vessel Tax in This Municipality (Draft for Comment)” and solicited public feedback. This ensures the continuity of preferential policies and further advances the exemption of vehicle and vessel tax for public transportation vehicles.

• Chongqing: The Municipal Taxation Bureau issued the “Notice on Optimizing Convenient Measures for ‘Buy Now, Refund Now’ Departure Tax Refunds.” Foreign tourists purchasing tax-refundable items at designated “buy-and-refund” stores (see list in appendix) and signing the service consent form as required will have their credit cards pre-authorized by the store or tax refund agent. The store will then issue an invoice and tax refund application form. Allowing travelers to apply for an advance payment in RMB equivalent to the actual VAT refund amount on the same day at the “Buy Now, Refund Now” store. This further enhances the convenience and satisfaction of the departure tax refund service for international travelers.

Please click the following link to see more industry trends: 中富博睿政策速递（2025年8月刊）

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