Everything You Need to Know About China's Economy on Tuesday (July 1)
Your Daily & Trustworthy Updates on the Chinese Economy
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HOWDY. Tian here in Beijing, welcoming you to your Tuesday edition of Everything You Need to Know About China's Economy.
DRIVING THE DAY, CHINA ROLLS OUT 10% TAX CREDIT FOR FOREIGN INVESTORS REINVESTING DIVIDENDS
China's finance, taxation and commerce authorities unveiled a tax incentive granting foreign investors a 10 percent corporate income tax credit on direct domestic investments funded by dividends from Chinese resident companies.
The measure, which takes effect from Jan 1, 2025 through Dec 31, 2028, allows unused credits to be carried forward and applies lower rates under existing tax treaties.
Eligible investors may reinvest dividends in equity capital increases, new resident enterprise establishments, or acquisitions of resident enterprise shares from non-affiliated parties. The industries or sectors in which the invested enterprise operates must be listed in the Catalogue of Encouraged Industries for Foreign Investment.
Investors can apply retroactively for qualifying reinvestments made between Jan 1, 2025, and the policy's announcement date.
ALSO ON TUESDAY, CHINA'S BOX OFFICE REVENUE HITS 29 BLN YUAN IN FIRST HALF OF 2025.
China's film market maintained strong growth in the first half of 2025, with total box office revenue exceeding 29.23 billion yuan (about 4.09 billion U.S. dollars), a 22.91 percent year-on-year increase, official data shows.
During the same period, the number of moviegoers increased to 641 million, a 16.89 percent rise from the previous year, according to the data released by the National Film Administration on Tuesday.
Domestic films accounted for 91.2 percent of the total earnings, playing an increasingly important role in the world's largest film market, data shows.
"Ne Zha 2," a domestic blockbuster that has amassed 15.45 billion yuan on the Chinese mainland in 2025, tops the Chinese box office chart as the most-watched and highest-grossing film ever in China.
MEANWHILE, CHINA'S BOND MARKET ISSUANCES REACH 7.2 TLN YUAN IN MAY.
Bond issuances in China neared 7.2 trillion yuan (about 1 trillion U.S. dollars) in May this year, data from the country's central bank shows.
Specifically, issuances of treasury bonds came in at 1.49 trillion yuan, while local government bond issuances amounted to 779.44 billion yuan, according to the People's Bank of China.
Financial bond issuances stood at 1.22 trillion yuan, and corporate credit bond issuances reached 902.27 billion yuan.
Outstanding bonds held in custody came in at 187.2 trillion yuan at the end of May.
IN TODAY'S FINANCIAL MARKET,
Chinese stocks closed higher on Tuesday, with the benchmark Shanghai Composite Index up 0.39 percent to 3,457.75 points.
The Shenzhen Component Index closed 0.11 percent higher at 10,476.29 points.
The combined turnover of these two indices stood at 1.47 trillion yuan (about 205.5 billion U.S. dollars), down from 1.51 trillion yuan on the previous trading day.
Shares in the sectors of shipbuilding and biopharmaceuticals led the gains, while those related to textile machinery and electronic information suffered the most.
The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, lost 0.24 percent to close at 2,147.92 points Tuesday.
The State Administration of Foreign Exchange has recently granted a total of 3.08 billion U.S. dollars in investment quotas to eligible Qualified Domestic Institutional Investors (QDII) to meet the demand for overseas asset allocation, it has said.
The move aims to further support QDII institutions in conducting cross-border investment activities in compliance with laws and regulations. Under the premise of effectively preventing risks, it seeks to meet the reasonable overseas investment demands of domestic residents, the administration said.
The QDII program is a key institutional arrangement for China's financial market opening. It allows eligible domestic financial institutions to remit both RMB and foreign currencies abroad within specified quotas to invest in overseas financial markets.
"Under the current stable and positive conditions in the foreign exchange market, granting quotas at an appropriate time can orderly meet the legitimate investment needs of market participants and contribute to the healthy development of the QDII system," the administration said.
The administration said that the quota allocation process comprehensively considers factors such as the asset management scale as well as internal control and compliance of QDII institutions.
China's benchmark interbank gold prices mixed Tuesday
According to the China Foreign Exchange Trade System, the benchmark price for gold that is 99.95 percent pure or above stood at 762.40 yuan per gram, 1.01 yuan lower from the previous trading day.
The price for gold that is 99.99 percent pure or aboves stood at 764.43 yuan per gram, up 1.13 yuan per gram.
Chinese yuan strengthens to 7.1534 against USD Tuesday
The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 52 pips to 7.1534 against the U.S. dollar Tuesday, according to the China Foreign Exchange Trade System.
In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.
AT THE END OF TODAY'S SHARING, LET'S TAKE A LOOK AT YOUR DAILY FUTURES:
Cotton futures closed lower Tuesday in daytime trading on the Zhengzhou Commodity Exchange (ZCE).
The most active cotton contract for September 2025 delivery lost 70 yuan (about 9.79 U.S. dollars) to close at 13,745 yuan per tonne.
On Tuesday, the total trading volume for six listed cotton futures contracts on the ZCE was 256,050 lots with a turnover of 17.58 billion yuan.
As the world's largest producer, consumer and exporter of textile, China listed cotton futures on ZCE in June 2004, helping cotton-related enterprises hedge the price risk.
Sugar futures closed lower Tuesday in daytime trading on the Zhengzhou Commodity Exchange.
The most active sugar contract for September 2025 delivery lost 27 yuan (about 3.77 U.S. dollars) to close at 5,775 yuan per tonne.
On Tuesday, the total trading volume for six listed sugar futures contracts on the ZCE was 234,407 lots with a turnover of 13.48 billion yuan.
As the world's important consumer and importer of sugar, China listed sugar futures on ZCE in January 2006, helping sugar-related enterprises hedge the price risk.
Iron ore futures closed lower on Tuesday in daytime trading at the Dalian Commodity Exchange (DCE).
The most active iron ore contract for September 2025 delivery dipped 9.5 yuan (about 1.33 U.S. dollars) to close at 708.5 yuan per tonne.
On Tuesday, the total trading volume of 12 listed iron ore futures contracts on the exchange was 439,786 lots, with a turnover of about 31.08 billion yuan.
As the world's largest importer of iron ore, China opened the DCE iron ore futures to international investors in May 2018.
No.1 soybean futures closed lower on Tuesday in daytime trading at the Dalian Commodity Exchange.
The most active No.1 soybean contract for September 2025 delivery dipped 20 yuan (about 2.8 U.S. dollars) to close at 4,127 yuan per tonne.
On Tuesday, the total trading volume of six listed No.1 soybean futures contracts on the exchange was 138,153 lots, with a turnover of about 5.69 billion yuan.
China is the world's largest soybean importer.
About the Newsletter:
Ran by TIAN Dongdong, this newsletter features daily and trustworthy content on China's economy. Having worked in Brussels, London, Cairo, and Tripoli for Chinese media as correspondent for several years, TIAN is now based in Beijing.