Asia
China launches global tax audit on super-rich to recover billions
China has launched a global crackdown on its super-rich to collect hundreds of billions of dollars in unpaid taxes dating back decades, seeking to narrow income and wealth inequality and close a deepening budget deficit.
Authorities have intensified their scrutiny of overseas capital gains and investments, with investigations extending in some instances as far back as 2000. The campaign comes as Beijing attempts to significantly expand its oversight of outbound capital flows.
According to foreign officials, Chinese bankers, and family office executives who spoke to the Financial Times, Chinese banks and other financial institutions have been instructed to review the overseas investments of wealthy Chinese nationals and check whether the resulting income has been declared to tax authorities in Beijing.
The efforts, which form part of sweeping tax reforms targeting the country’s wealthy elite and offshore trusts, focus on gains derived from the acquisition of assets such as real estate, equities, precious metals, and cryptocurrencies.
Numerous officials, bankers, and advisers confirmed the retrospective nature of the campaign, noting that inquiries cover periods reaching back more than 25 years in certain cases.
A banker in southern China said that in recent months, Chinese banks have increasingly coordinated with tax authorities to freeze the accounts of wealthy clients until officials are satisfied that taxes on capital gains from overseas assets, accounts, and trusts have been paid.
“In standard practice, these wealthy individuals immediately pay the penalties and taxes in cash to get their accounts unfrozen,” the banker said.
The timeframes examined in the tax audits appear to vary significantly. For instance, an executive at a Shenzhen-based family office said clients were asked to pay taxes on gains generated from overseas assets between 2017 and 2022. No explanation was provided as to why that specific period was targeted.
Victor Shih, a professor of Chinese political economy at the University of California, San Diego, said the motivation behind the new campaign was “clearly rooted in fiscal reasons.”
China’s fiscal revenues, where taxes plug a critical gap, have largely stagnated since the pandemic and contracted by 1.7% in 2025 to 21.6 trillion yuan, or $3.2 trillion. Total public revenue from land sales, once a primary source of state income, fell to 4.15 trillion yuan following a real estate market downturn, down from a peak of 8.7 trillion yuan in 2021.
Last month, China also enacted comprehensive tax rules governing assets transferred to offshore trusts. According to a joint statement by China’s Ministry of Finance and the State Taxation Administration, the regulation closed a legal loophole long utilized by wealthy individuals to protect their assets abroad.
Under the new rules, income generated from offshore trusts will be subject to a 20% tax across multiple stages.
A Singapore-based banker who manages overseas assets for wealthy Chinese nationals said the offshore trust tax “shocked” clients.
“There are people who established trusts for public assets, such as shares in listed companies. During periods when initial public offerings were very common, holding the right trust structure provided protection regarding income tax. This new decision has eliminated that advantage,” the banker said.
While experts suggest that some complex overseas structures may evade the new rules, many trust holders are expected to face a one-off tax liability. Reports indicate that some may be forced to sell assets to meet the payments.
Together with other tax reforms, the new policies will align China’s taxation system more closely with that of the US, where American taxpayers are generally taxed on their worldwide income.
Ye Yongqing, a Shanghai-based tax lawyer and partner at Anli Partners, said, “Regulatory bodies have steadily tightened oversight of cross-border capital flows, declarations of overseas income, and foreign exchange transactions. Consequently, the scope for wealthy Chinese to transfer assets abroad or structure their tax affairs through offshore vehicles has narrowed.”
Ye noted that Beijing has adopted a restrictive approach toward offshore trusts similar to US tax legislation, broadly rejecting attempts by taxpayers to use these vehicles to defer or entirely eliminate tax.
There are also indications that stricter tax collection from China’s wealthy has yielded results in recent years. Official data shows that personal income tax revenues rose 11.5% in 2025, driven by the impact of previous campaigns, including the taxation of Hong Kong stock transactions. This growth rate significantly outpaced the 0.8% expansion in overall tax revenues.
An executive at an immigration firm with offices in China and New York said authorities initially targeted wealthy Chinese trading US equities via Hong Kong or other overseas channels.
The executive said the inquiries are expected to expand next to individuals holding substantial financial assets in overseas bank accounts, particularly in Hong Kong, and ultimately to other forms of offshore wealth, including real estate.
Asia
India intel push on China risks dangerous miscalculation, study says
A Chinese scholar has warned that Indian intelligence agencies increasingly treating China’s routine activities as threats raises the risk that New Delhi could miscalculate and adopt “unilateral countermeasures” against Beijing.
According to Zhao Ruoxi, a researcher at the Macau University of Science and Technology, India stepped up its intelligence-gathering operations following the deterioration of relations with neighbouring China in recent years.
Zhao made the assessment in an article analysing Indian intelligence operations targeting China across the 2020–2026 period. The study was published in the 31 July issue of the Chinese-language Journal of Intelligence, issued by the Shaanxi Information Institute of Science and Technology, and reported by the South China Morning Post.
According to Zhao, China’s political and economic presence in South Asia, its emphasis on emerging technologies, and its naval activities in the Indian Ocean have been monitored more closely by India since a 2020 border clash.
In that clash in the Galwan Valley, 20 Indian and four Chinese soldiers were killed, dragging relations between the two countries to one of their lowest points in history.
Zhao noted that India has expanded its intelligence collection tools in recent years, drawing on space-based reconnaissance systems, drone surveillance, and cyber intelligence to establish a multi-agency network targeting China.
According to the article, India has also cooperated with the US and Middle Eastern nations to enhance its capacity to track Chinese naval operations in distant waters and exert informational pressure along Beijing’s maritime energy supply routes.
However, Zhao described India’s heavy reliance on foreign-sourced data as a “structural weakness”, arguing that it leaves New Delhi’s assessments of China vulnerable to the strategic agendas of third parties.
Zhao observed that while relations between Beijing and New Delhi began to improve in late 2024, India’s expanded intelligence activities directed at China have persisted.
The two countries took steps to mend ties after reaching an agreement in 2024 on resuming border patrols. Direct flights resumed after a five-year hiatus, Beijing once again permitted Indian pilgrims to visit the Tibet Autonomous Region, and India resumed issuing visas to Chinese tourists.
Last year, in another sign of easing tensions, Indian Prime Minister Narendra Modi visited China for the first time in seven years. In his meeting with Modi in Tianjin, Chinese President Xi Jinping said border issues should not define bilateral relations.
Following the reopening of the Lipulekh Pass in June, which Beijing viewed as a goodwill gesture, the two countries also resumed cross-border trade in August through the Himalayan passes of Nathu La and Shipki La.
In the article, Zhao stated that India is expected to ramp up technical surveillance in border areas, which will compel China to bolster its information security.
Zhao also warned that New Delhi could “systematically disrupt” Beijing’s diplomatic engagements with its South Asian neighbours, particularly its efforts to build regional trust and advance projects under the Belt and Road Initiative.
According to Zhao, the expansion of India’s intelligence operations against China heightens the risk of miscalculation, as routine Chinese activities are increasingly perceived as threats.
“As a result, the likelihood of triggering unilateral countermeasures increases,” Zhao assessed.
Zhao said China must make its strategic messaging more effective and reinforce communication with South Asian states and Indian Ocean littoral nations to counter this pressure.
Asia
China and Arab states launch 5-year anti-desertification plan
China and Arab nations have launched a five-year action plan to combat drought, desertification, and land degradation. According to information provided by China’s National Forestry and Grassland Administration (NFGA) to the Global Times on Sunday, the plan will extend bilateral cooperation beyond traditional anti-desertification efforts to encompass technological innovation in areas including grassland conservation, watershed management, and wetland protection.
The plan was inaugurated during a meeting convened on the sidelines of the 17th session of the Conference of the Parties (COP17) to the United Nations Convention to Combat Desertification, which is currently taking place in Ulaanbaatar, the capital of Mongolia.
According to an NFGA press release sent to the Global Times, China and Arab countries will, under the action plan, deepen practical cooperation over the next five years across key areas such as the restoration of desertified and degraded land, sand and dust storm monitoring and early warning systems, grassland management, biodiversity conservation, as well as wetland protection and restoration.
The two sides will also accelerate technological innovation and the practical application of research findings by establishing platforms to share technology, data, and research outcomes, conducting interdisciplinary studies, and developing technologies such as remote sensing and intelligent assessment of land degradation. The plan further envisages the establishment of demonstration bases to support the implementation of the UN Convention to Combat Desertification.
Under the plan, the sides also aim to strengthen China-Arab cooperation networks in combating desertification, enhance mechanisms for sharing policies, technologies, and research findings, and expand partnerships within the framework of China’s proposed Belt and Road Initiative. The participation of governments, research institutions, enterprises, social organisations, and local communities will be encouraged throughout the process.
Cooperation in capacity building will also be expanded through exchange programmes for young professionals, joint research, field demonstrations, and technical training sessions.
The meeting was jointly organised by China’s National Forestry and Grassland Administration and the General Secretariat of the Arab League, while the Chinese Academy of Forestry and the China-Arab International Research Centre for Drought, Desertification and Land Degradation undertook the event’s organisation.
Cui Lijuan, vice president of the Chinese Academy of Forestry, stated that several initiatives have already begun to materialise. For example, China and Egypt are exploring the possibility of conducting a comparative study examining the Yellow River and Nile River basins to share expertise in ecological conservation and integrated watershed management.
According to Cui, the initiative in question has secured the backing of the Chinese Academy of Forestry and attracted interest from international non-governmental organisations.
Future cooperation between China and Arab countries will also focus on desertification monitoring and early warning systems, ecological technologies, as well as exchange and training programmes for young specialists.
Cui noted that the two sides also aim to broaden participation by integrating businesses, social organisations, and international institutions into the cooperation framework, which is currently led primarily by state bodies.
According to Xinhua, the China-Arab International Research Centre for Drought, Desertification and Land Degradation was inaugurated in 2023 during an international forum on combating desertification. The establishment of the centre was viewed as a demonstration of China’s commitment to sharing the expertise gained from its anti-desertification efforts in the Kubuqi Desert.
According to the NFGA, the centre has steadily strengthened regular cooperation mechanisms between China and Arab countries over the past three years. While the two sides have jointly developed Earth observation systems and intelligent decision-support tools for land degradation, China has compiled 30 practical anti-desertification technologies across six categories suitable for application in Arab countries.
The centre has also established regular communication and exchange channels with several countries, including Saudi Arabia and Egypt. In addition, it has set up an initial China-Arab anti-desertification network and expert pool to support sustainable technical cooperation and professional training in Arab nations.
Asia
China outpaces India in race for Russian crude oil supplies
China has accelerated its crude oil purchases from Russia to replace oil shipments originating from the Middle East.
According to a Reuters report based on data from energy analytics firm Kpler, China is outpacing India in the Russian oil market.
India’s crude imports from Russia’s European ports fell by approximately 30% in August.
Beijing’s increased purchases could curb India’s exports of refined petroleum products and consequently trigger a diesel and gasoline shortage across Asia.
While China previously favoured ESPO blend crude shipped from Russia’s Asian ports, the share of its purchases from Russia’s European ports, consisting primarily of the Urals grade, has climbed to 31%.
Russian crude imports by India, the world’s third-largest oil importer, dropped to 1.87 million barrels per day in August. This volume remained well below the 2.79 million barrels per day recorded in July.
Under this scenario, which poses a risk to the Asian region, India stands as the region’s largest exporter of diesel and gasoline.
However, the country’s total crude imports in August were recorded at 4.17 million barrels per day. This figure marked the lowest level since the outbreak of conflict in the Middle East.
If the tightening raw material supply prevents Indian refineries from maintaining processing throughput, a severe deficit in refined products could emerge across the Asian market starting in September.
The Times of India previously reported that India’s Russian crude imports reached their highest share since 2022 in July.
During that period, Russia supplied more than half of India’s total crude imports of just over 5 million barrels per day, delivering 2.8 million barrels per day.
At the end of July, the Russian government extended its temporary export ban on gasoline, diesel, and other fuel types until 31 January 2027.
Under the restrictions that took effect on 1 August, direct exports of diesel, marine fuel, and gas oils by refiners will be exempted starting 1 September.
Bloomberg reported in June that Russian Urals crude was being sold in India at a $3.90 discount per barrel against international benchmarks after a hiatus of more than two months.
Urals crude traded at a discount again on 29 May for the first time since mid-March.
According to The Times of India, however, this discount on Russian Urals crude had almost entirely evaporated by early August.
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