Wang Huning tours Tibet; US government officials go after Moonshot; Wang Yi-Rubio meeting; PRC-Philippines; H1 fiscal revenue and expenditure data
Today’s top items:
1. Wang Huning tours Tibet - Wang Huning, Politburo Standing Committee member and CPPCC Chairman, inspected Tibet from July 19 to 22, Xinhua reports. Beyond Lhasa he went to Ngari Prefecture in the far west, with stops including Sera Monastery, Tholing Monastery in Zanda County, a police station, and Dianjiao Village in Gar County, a “model” border village on the LAC opposite Indian-held Demchok.
From the readout, translated here:
Wang Huning said that governing Tibet begins with stabilizing Tibet: the requirements for governing Tibet according to law must be implemented, the foundations of social governance consolidated, and a united and stable political and social situation cemented. Ethnic unity is the lifeline of the people of all China’s ethnic groups; drawing on the great achievements the Party has led the people to over 105 years since its founding, and on the earth-shaking changes on the snowy plateau in the 75 years since Tibet’s peaceful liberation, propaganda and education work on forging a strong sense of community for the Chinese nation and building the community of the Chinese nation must be carried out in ways that are tangible, felt and effective, and the drive to create a national model area for ethnic unity and progress must be deepened. The implementation of the Law on Promoting Ethnic Unity and Progress must be carried through, the capacity for administering ethnic affairs according to law raised, and all development imbued with the significance of ethnic unity and progress. In line with the requirements to systematically advance the sinicization of religion in China and strengthen law-based governance of religious affairs, Tibetan Buddhism must be continuously guided to adapt to socialist society. Protection and use of Tibet’s historical documents, archaeological artifacts and cultural remains must be strengthened, showing the historical process of exchange, interaction and integration among ethnic groups and the breadth and brilliance of Chinese civilization. The new-era campaign to invigorate border areas and enrich the people there must be advanced, gains in poverty alleviation consolidated and expanded, infrastructure in border areas strengthened, and production and living conditions for border residents improved, so that people of all ethnic groups can lead happier and better lives.
王沪宁表示，治藏首先是稳藏，要落实依法治藏要求，夯实社会治理基础，巩固团结稳定的政治和社会局面。民族团结是我国各族人民的生命线，要结合建党105周年党团结带领人民取得的伟大成就，结合西藏和平解放75周年雪域高原发生的翻天覆地变化，有形有感有效开展铸牢中华民族共同体意识、推进中华民族共同体建设的宣传教育，深化全国民族团结进步模范区创建。要抓好民族团结进步促进法贯彻实施，提高依法治理民族事务能力和水平，推动所有发展赋予民族团结进步的意义。要按照系统推进我国宗教中国化、加强宗教事务治理法治化的要求，不断引导藏传佛教与社会主义社会相适应。要加强对西藏历史文献、考古实物、文化遗存等的保护利用，展现各民族交往交流交融历史进程，展现中华文明的博大灿烂。要推进新时代兴边富民行动，巩固拓展脱贫攻坚成果，加强边境地区基础设施建设，改善边境群众生产生活条件，让各族群众过上更加幸福美好的生活。
He called for propaganda and education on “forging a strong sense of community for the Chinese nation” (铸牢中华民族共同体意识) pegged to two anniversaries — 105 years of the Party and 75 years since Tibet’s “peaceful liberation” — and for implementing the new Law on Promoting Ethnic Unity and Progress, in effect since July 1. Wang gave a similar instruction in Xinjiang June 5-9, making Tibet the second stop in six weeks on what looks like a PBSC implementation tour for the law. Is Inner Mongolia next?
2. Wang Yi and Marco Rubio meet in Manila - The two met on the sidelines of the ASEAN Foreign Ministers' Meeting in Manila. Both readouts made the meeting sound constructive, and the plans for Xi to visit DC in September are on track. From the Xinhua readout, translated here:
The two sides agreed that this meeting was pragmatic, positive, and constructive, and agreed to jointly implement the important consensus reached by the two heads of state, give play to the role of political and diplomatic channels, prepare well for high-level exchanges in the next stage, and push for substantive progress in the constructive China-US relationship of strategic stability.
双方认为，此次会晤务实、积极、富有建设性，同意共同落实两国元首达成的重要共识，发挥政治外交渠道作用，筹备好下阶段高层交往，推动中美建设性战略稳定关系取得实质进展。
From Rubio’s remarks to the media:
Well, we talked a lot about the visit in September, and that was really the gist of it. It was just to create the groundwork for another positive visit. I think President Xi will have a very positive visit when he comes to Washington.
Look, these are the two most powerful countries in the world, particularly economics, but also – I mean, we have to have a relationship. And obviously, there are areas of great differences. Both sides will acknowledge that. We’ll have to work through those. And I think these differences will exist for the foreseeable future, and our job is to sort of manage those so that they never get out of control.
3. PRC-Philippines - Wang Yi met with Philippine Secretary of Foreign Affairs Lazaro. According to the Xinhua readout Wang expressed a “strong protest” about the recent clash at Second Thomas Shoal/Ren’ai Jiao and blamed “certain forces in the military and police departments…carrying out the wishes of external forces”:
Wang Yi, member of the Political Bureau of the CPC Central Committee and Foreign Minister, met at the latter’s request with Philippine Secretary of Foreign Affairs Lazaro on the 22nd in Manila on the sidelines of the East Asia cooperation foreign ministers’ meetings, setting out China’s stern position to the Philippine side and expressing strong protest against the crude action of Philippine personnel ramming a Chinese law-enforcement vessel at Ren’ai Jiao (Second Thomas Shoal).
新华社马尼拉7月22日电（记者李萌 赵晨捷）中共中央政治局委员、外交部长王毅22日在马尼拉出席东亚合作系列外长会期间应约会见菲律宾外长拉扎罗，向菲方阐明中方严正立场，对菲方人员在仁爱礁冲撞中方执法船只的粗暴行径表示强烈抗议。
Wang Yi said that over the past few years, China-Philippines relations have continuously faced difficulties and challenges; this clearly does not accord with the interests of either side, and it does even more harm to the Philippines’ own development. Facing a world of intertwined change and turmoil, we should have been jointly safeguarding the hard-won situation of peace and development in this region, but the Philippines’ actions have run counter to those of other countries in the region, making it a source of disruption to regional peace and stability. Facts have proven that allowing external forces to interfere and intervene, and deliberately hyping up and enlarging maritime differences, will only reduce one to a tool used by others. Those who attempt to provoke trouble by relying on countries from outside the region will in the end only swallow the bitter fruit of their own making. Regrettably, whenever China and the Philippines are about to conduct dialogue, there are people within the Philippines — in particular certain forces in the military and police departments — who deliberately manufacture incidents to sabotage the advancement of dialogue. These people harbor ill intentions; what they think about is not the welfare of the Philippine people but carrying out the wishes of external forces, while also seeking their own private gain. At present, China-Philippines relations stand at a crossroads, and which way they go requires the Philippine side to make the correct and rational choice.
王毅表示，过去几年，中菲关系持续面临困难挑战，这显然不符合双方利益，更有损菲律宾自身发展。面对变乱交织的世界，我们本应共同维护本地区得来不易的和平发展局面，但菲律宾的做法却与其他地区国家背道而驰，成为地区和平稳定的干扰源。事实证明，任由外部势力干涉介入，蓄意炒作扩大海上分歧，只会沦为被人利用的工具。如果试图借助域外国家挑衅滋事，最后只能吞下自己酿成的苦果。遗憾的是，每当中菲双方要开展对话时，菲国内就有人特别是军警部门一些势力，蓄意制造事端，破坏对话的推进。这些人居心不良，他们想的不是菲人民的福祉，而是执行外部势力的旨意，也是在谋取个人的私利。当前，中菲关系站在十字路口，何去何从需要菲方作出正确理智选择。
The clash, and the disgusting monkey video from China Daily, did not help China at the ASEAN meeting.
4. US government to go after Moonshot for Kimi K3? - The head of the White House Office of Science and Technology Policy, the Treasury Secretary and a senior State Department official all tweeted similar things about Kimi and distillation today. Secretary Bessent was most specific about possible policy responses - ”sanctions and Entity List designations will be on the table”.
Kratsios, the head of the OSTP, accused Moonshot of “a sophisticated internal platform to conduct large scale distillation against U.S. models, allowing them to quickly switch between multiple methods of access to avoid detection. Moonshot AI has also acquired GB300-equipped servers and has accessed GB300s in Thailand, likely to train its AI models.”
Moonshot should release the K3 open weights and details about what infrastructure K3 trained on.
The debate about PRC models and distillation is breaking brains throughout Silicon Valley and the AI community, with many arguing the US government is at risk of regulatory capture by Anthropic and OpenAI, and instead should just focus on competing, and anyway the US frontier labs are all built on the distillation of human knowledge so who are they to whinge about being distilled.
If the US officials are making the argument to President Trump that the Chinese labs are ripping America off and risk crashing the stock market by undermining investor confidence in the AI boom that is driving the stock market, the odds of US government actions against some of these labs are high, no matter what David Sacks and other Silicon Valley leaders, including Nvidia’s Jensen Huang, try to argue. But the debate is far from over, and do not be surprised if Sacks and Huang show up in DC soon to make the opposing arguments.
5. H1 fiscal revenue and expenditure data - According to the Ministry of Finance announcement today, translated here:
In the first half of the year, national general public budget revenue was 12.1047 trillion yuan, up 4.7% year-on-year. Of this, national tax revenue was 9.7865 trillion yuan, up 5.3% year-on-year; non-tax revenue was 2.3182 trillion yuan, up 2.3% year-on-year. Broken down by central and local government, central general public budget revenue was 5.224 trillion yuan, up 7.5% year-on-year; local general public budget revenue at the local level was 6.8807 trillion yuan, up 2.7% year-on-year.
上半年，全国一般公共预算收入121047亿元，同比增长4.7%。其中，全国税收收入97865亿元，同比增长5.3%；非税收入23182亿元，同比增长2.3%。分中央和地方看，中央一般公共预算收入52240亿元，同比增长7.5%；地方一般公共预算本级收入68807亿元，同比增长2.7%。
Bloomberg did its own analysis and reports that China Cuts Government Spending 11.9% in June as Fiscal Tightening Deepens:
A broad measure of expenditure tumbled 11.9% in June from a year earlier, according to Bloomberg calculations based on Ministry of Finance data released Wednesday. By contrast, broad fiscal revenue gained 1.8%.
That took the broad deficit in the first half to 4.57 trillion yuan ($675 billion), 13% less than a year earlier.
Perhaps the Politburo meeting next week will reverse that trend?
The tax authorities are getting better at squeezing high-income individuals, per Yicai:
Individual income tax grew rapidly in the first half (13.1%), returning to the position of third-largest tax. Huang Lixin, director of the Tax Science Research Institute of the State Taxation Administration, said earlier that the fast growth in individual income tax revenue this year has three main causes: first, an active capital market has driven high-speed growth in related income categories; second, tax payments in some industries have grown quickly; and third, tax authorities’ continued efforts to guide and regulate tax compliance by high-income individuals have added revenue.
今年上半年个人所得税保持较快增长（13.1%），重新回到第三大税种位置。国家税务总局税收科学研究所所长黄立新此前表示，今年以来个人所得税收入增长较快主要有三个原因：一是资本市场活跃带动相关所得项目高速增长；二是部分行业缴税增长较快；三是税务机关持续加强高收入人员纳税引导规范带来增收。
And the stock market boom has been good for revenue, with stamp duty revenue up 97%. But land and property-related revenue keeps shrinking, per the Economic Observer:
Growth in land- and property-related taxes is still sliding. Land appreciation tax was 214.6 billion yuan, down 15.3% year-on-year; farmland occupation tax was 83 billion yuan, down 3.5%. A declining land appreciation tax usually signals pressure on new home sales, weak developer appetite for land acquisition and new construction starts, and a downturn in the new-home development chain; the decline in farmland occupation tax means developers are unwilling to take on new residential land.
涉及土地和房地产市场的土地增值税和耕地占用税增速还在下滑。其中，土地增值税2146亿元，同比下降15.3%，耕地占用税830亿元，同比下降3.5%。土地增值税下滑通常意味着商品房销售承压、房企拿地和新开工意愿偏弱，新房开发链条景气度下行；耕地占用税的下降则意味着，房企不愿拿新增住宅用地。
Wang Zhenyu judges that for a period to come, land sale revenue (land finance) still has a probability of continuing to decline, and rational expectations should be prepared.
王振宇判断，未来一个时段，土地出让收入（土地财政）还存在继续下行的概率，需要做好理性预期准备。
“Rational expectations should be prepared” sounds like “there is no bottom in sight” for the property market?
Thanks for reading.
1. Wang Huning tours Tibet
Politburo Standing Committee member and CPPCC National Committee Chairman Wang Huning conducted an inspection in Tibet from July 19 to 22. He said it is necessary to thoroughly implement the spirit of the Fourth Plenum of the 20th Central Committee, implement General Secretary Xi Jinping’s important expositions on Tibet work and the Party’s strategy for governing Tibet in the new era, keep a firm grip on the four major tasks of stability, development, ecology and strengthening the borders, and strive during the 15th Five-Year Plan period to advance the building of a new modern socialist Tibet.
新华社拉萨7月22日电（记者丁小溪）中共中央政治局常委、全国政协主席王沪宁7月19日至22日在西藏调研。他表示，要深入贯彻落实党的二十届四中全会精神，贯彻落实习近平总书记关于西藏工作的重要论述和新时代党的治藏方略，持续抓好稳定、发展、生态、强边四件大事，在“十五五”时期奋力推进社会主义现代化新西藏建设。
Wang Huning traveled to Lhasa and Ngari prefecture, visiting Lhasa’s Unity Park and Sera Monastery, Sexiong Square in Purang County of Ngari, Tholing Monastery, a moderately prosperous village, a police station and a health center in Zanda County, and Dianjiao Village in Gar County, learning about social stability, ethnic unity, monastery management, the campaign to invigorate border areas and enrich the people there, and the protection of history and culture, and holding discussions with cadres and members of the public of all ethnic groups.
王沪宁来到拉萨市、阿里地区调研，前往拉萨团结公园、色拉寺，阿里地区普兰县色雄广场，札达县托林寺、小康村、派出所、卫生院，噶尔县典角村等，了解社会稳定、民族团结、寺庙管理、兴边富民、历史文化保护等情况，并同各族干部群众座谈交流。
Study Times 学习时报, July 22, 2026, page 1 | Byline: Chu Songyan 褚松燕 The author is director of the United Front Work Teaching and Research Department of the Central Party School (National Academy of Governance)
As historical materials and sources continue to be excavated and uncovered, and as exchanges and contacts among the civilizations of human society continue to deepen, research into the origins, present reality, and development of the objective world also continues to deepen; bringing forth the new through the old has already become both inevitable and necessary. Research on the Chinese national community necessarily requires tracing things to their roots and clarifying them at the source while based on Chinese soil, and unfolding in depth on different questions, especially foundational ones. Constructing the theoretical system of the Chinese national community requires that, on the basis of optimizing disciplinary arrangements, we strengthen discipline construction, deepen research on major foundational questions arising from major real-world problems and challenges, and produce a steady stream of original theoretical results, so as to construct with high quality a scientific and complete theoretical system of the Chinese national community and provide good answers to the questions of China, the questions of the world, the questions of the people, and the questions of the times.
随着史料资料的不断挖掘发掘，随着人类社会文明间交往交流的不断深入，对客观世界的由来、现实和发展的研究也在不断深入，推陈出新，已经是必然和必需。中华民族共同体研究必然要求立足中国大地追根溯源、正本清源，针对不同问题特别是基础性问题深入展开。构建中华民族共同体理论体系要在优化学科设置的基础上，加强学科建设，从重大现实问题和挑战中深化重大基础性问题研究，源源不断推出原创性理论成果，高质量构建科学完备的中华民族共同体理论体系，回答好中国之问、世界之问、人民之问、时代之问。
CCTV report on Wang’s visit to Tibet
2. Wang Yi and Marco Rubio meet in Manila
Wang Yi Meets US Secretary of State Rubio - Translation
Wang Yi, member of the Political Bureau of the CPC Central Committee and Foreign Minister, met with US Secretary of State Rubio in Manila on the 22nd.
新华社马尼拉7月22日电（记者赵晨捷 李萌）中共中央政治局委员、外交部长王毅22日在马尼拉会见美国国务卿鲁比奥。
Wang Yi said that this year is a “big year” for China-US relations. The two heads of state successfully held a historic meeting in Beijing, established the positioning of a constructive China-US relationship of strategic stability, and set out the direction for the two sides’ joint efforts. This is important progress made by China and the United States, two major countries, in exploring a path of peaceful coexistence; it accords with the fundamental interests of the two peoples and with the common expectations of the international community. Our responsibility now is to follow the track set by the two heads of state, eliminate interference and overcome obstacles, and ensure that the leaders’ consensus is transformed into whole-of-government, all-domain consensus and action — using China-US strategic stability to promote peace and tranquility in the world, and using constructive China-US interaction to provide important impetus for international cooperation. Wang Yi also set out China’s stern position on a series of recent negative words and deeds by the US side, demanding that the US respect China’s core interests, abide by the one-China principle, earnestly manage contradictions and differences, and address China’s legitimate concerns, so that this year of opportunity for China-US relations becomes reality.
王毅表示，今年是中美关系的“大年”。两国元首在北京成功举行历史性会晤，确定了中美建设性战略稳定关系的定位，提出了双方共同努力的方向。这是中美两个大国在探索和平共处道路上取得的重要进展，符合两国人民根本利益，符合国际社会共同期待。现在我们的责任是，沿着两国元首设定的轨道，排除干扰、克服障碍，确保将领导人的共识转化为全政府、各领域的共识和行动，以中美的战略稳定促进世界的和平安宁，以中美的建设性互动为国际合作提供重要动力。王毅还就近期美方的一系列消极言行阐明中方严正立场，要求美方尊重中国的核心利益，恪守一个中国原则，切实管控矛盾分歧，解决中方正当关切，让中美关系的机遇之年照进现实。
The two sides also exchanged views on international and regional hotspot issues.
双方还就国际地区热点问题交换了意见。
Secretary of State Marco Rubio Remarks to the Press - United States Department of State
SECRETARY RUBIO: Well, we talked a lot about the visit in September, and that was really the gist of it. It was just to create the groundwork for another positive visit. I think President Xi will have a very positive visit when he comes to Washington.
Look, these are the two most powerful countries in the world, particularly economics, but also – I mean, we have to have a relationship. And obviously, there are areas of great differences. Both sides will acknowledge that. We’ll have to work through those. And I think these differences will exist for the foreseeable future, and our job is to sort of manage those so that they never get out of control.
We’re, obviously, always going to defend our national interest. And I expect they’ll do the same, as they define it. But I think there are some areas of potential cooperation. So the work we need to do between now and September is to identify what those areas are so that we can lay the groundwork for a very positive visit to Washington, and – in September. And so we talked a lot about that.
QUESTION: Was there disagreement on election interference?
SECRETARY RUBIO: We didn’t discuss that topic.
QUESTION: Mr. Secretary, are China and Russia giving targeting information to Iran? These last few attacks have been very devastating to U.S. troops.
SECRETARY RUBIO: Look, all I would say is that anytime you’re in a combat zone like that, there’s danger associated with it. I mean, at the end, this actually proves the point that this is what Iran has been investing its money in for the last 20 years.
QUESTION: But are China and Russia giving targeting information to them?
SECRETARY RUBIO: I’m not going to discuss that, other than to say that nothing that’s happened – no – nothing that China has done has in any way changed the trajectory of the – of what you’re seeing in terms of the conflicts we’re having with Iran. And in fact, in some cases, they’ve actually been quite cooperative —...
It’s important to – if you go back to the height of the Cold War, even in the height of the Cold War, even in its most tense moments, the United States and the Soviet Union were – communicated, at least at a military-to-military level and even at a diplomatic level, and in many ways that prevented catastrophe. So I’m not saying we’re at that stage with China, but what I am saying is it would, frankly, be reckless and irresponsible for the U.S. and China not to have a relationship, given the impact and the – our countries have on the global economy and on the world.
QUESTION: Did you discuss with China, with Minister Wang Yi, the working group, or any more details of the Board of Trade, Board of Investment, any of these other ideas?
SECRETARY RUBIO: Yes, we did. We did, and we’re moving towards implementation of that, and I think that’s one of the potential concrete deliverables that we can have before September when that visit happens. And again, those are good ideas, and they come in the aftermath of the visit we took to China earlier this year. And so we did discuss that, yes.
3. PRC-Philippines
Wang Yi Meets Philippine Foreign Secretary Lazaro - Translation
Wang Yi stressed that in developing China-Philippines relations, the key is to grasp the correct direction. China has never been a security threat to the Philippines and has never in history invaded or colonized the Philippines. The existence of territorial and maritime delimitation disputes between China and the Philippines is an objective fact. China has always been committed to managing differences and stabilizing the situation through bilateral dialogue and consultation. But the Philippine side abandoned the bilateral negotiation channel and, at the instigation of forces from outside the region, threw together the makeshift outfit of a temporary “arbitral tribunal” and concocted and hyped an illegal and invalid so-called “award,” which China from the very beginning did not accept and did not participate in, and will certainly never recognize. The Philippine side should immediately cease its provocative actions on maritime issues, abide by the commitments it has made to China to date, and make concrete efforts to stabilize bilateral relations.
王毅强调，发展中菲关系，关键要把握正确方向。中国从来不是菲律宾的安全威胁，历史上从未侵略或殖民过菲律宾。中菲存在领土和海洋划界争议是客观事实。中方始终致力于通过双边对话协商管控分歧、稳定局势。但菲方却背离双边谈判渠道，在域外势力怂恿下，搭了个临时“仲裁庭”的草台班子，炮制炒作非法无效的所谓“裁决”，中方从一开始就不接受、不参与，更不会承认。菲方应立即停止在涉海问题上的挑衅行为，恪守迄今对中方作出的承诺，为稳定双边关系作出切实努力。
Lazaro said that Philippines-China exchanges have a long history, and the two are neighbors that cannot be moved apart. The Philippines has always pursued a one-China policy and honors the commitments made at the establishment of diplomatic relations; there is only one China in the world, and Taiwan is an inalienable part of China’s territory. The Philippine side hopes through dialogue to find an appropriate way to resolve maritime issues and to strive to achieve an improvement in bilateral relations.
拉扎罗表示，菲中交往历史悠久，是搬不走的邻居。菲方始终奉行一个中国政策，履行建交承诺，世界上只有一个中国，台湾是中国领土不可分割的一部分。菲方希望通过对话，寻找涉海问题的妥善解决办法，争取实现两国关系的改善。
PH raises Ayungin attack, China Daily monkey video in talks with Wang Yi - newswatchplus.ph
The Philippines raised its strongest concerns yet over China’s recent actions in the West Philippine Sea during high-level talks Tuesday, July 22, protesting the violent confrontation at Ayungin Shoal, the depiction of Filipinos as monkeys in a Chinese state media video, and Beijing’s continued presence at Bajo de Masinloc.
Foreign Affairs Secretary Ma. Theresa Lazaro conveyed Manila’s positions during a bilateral meeting with Chinese Foreign Minister Wang Yi on the sidelines of the ASEAN Foreign Ministers’ Meetings at the Philippine International Convention Center in Pasay City. The meeting marked the first bilateral engagement at the foreign minister level between the two countries in two years.
According to the Department of Foreign Affairs, Lazaro reiterated the Philippines’ “strong protest” over the violent actions of China Coast Guard personnel against Philippine Navy personnel during a resupply mission to Ayungin Shoal on July 20.
Lazaro reiterated the Philippines’ call for the removal of China’s remaining structures at Bajo de Masinloc.
The DFA said Lazaro also raised the China Daily video that depicted Filipinos as monkeys, telling Wang that disagreements over legal and political issues “do not justify resorting to disturbing imagery.”
She described the portrayal as “deeply offensive, distressing, and unacceptable.”
Another PRC diplomat tries to downplay the monkey video:
Xinhua Commentary: Manila’s distortion campaign changes nothing on South China Sea
Every new provocation by Manila serves the same purpose: to maintain an unlawful presence there while obscuring who triggered the dispute in the first place. That also explains why every maritime incident is quickly followed by a misinformation campaign.
Earlier this month, the Philippines joined hands with some external countries in a statement to revive the so-called “South China Sea arbitration award” a decade after its release, despite its lack of legitimacy and the absence of any regional consensus surrounding it.
By doing so, the Philippines aims to magnify a dispute of its own making into a geopolitical flashpoint.
China, ASEAN push for cooperation, COC progress amid Philippines-provoked frictions - Global Times
According to Xu Liping, director of the Center for Southeast Asian Studies at the Chinese Academy of Social Sciences, at successive ASEAN diplomatic gatherings, a handful of countries keep hyping South China Sea issue with similar tactics in a bid to undermine China-ASEAN relations. Certain non-regional nations also attempt to exploit the South China Sea issue to contain China.
“As ASEAN’s rotating chair for this year, Manila’s relevant moves mismatch its status,” said Xu, “By roping in outside forces to stir up trouble in the South China Sea and stoking bloc confrontation, the Philippines runs counter to ASEAN’s collective interests.”
4. US government to go after Moonshot for Kimi K3?
China’s ‘AI for All’ Push Defies US Containment Playbook - Bloomberg
The dispute also shows how China may be turning on its head a strategy first outlined by Commerce Secretary Howard Lutnick. Starting last year, Lutnick sought to keep Chinese developers “addicted” to the American technology stack while keeping a US edge — by advocating sales of Nvidia Corp. chips that were a step down from its most advanced products.
Chinese developers, however, are now creating a dependency of their own. Their inexpensive models are becoming embedded in the work of American startups, researchers and AI infrastructure providers, potentially leaving US companies vulnerable to any attempt by Washington to sever those links.
Axios Exclusive: Nvidia’s Jensen Huang defends Chinese AI amid Kimi panic
When it comes to policy, Huang believes restricting open models in the name of national security could leave America more vulnerable.
He rejected the “misconception” that downloaded Chinese models create a “backdoor” to Beijing, arguing that companies can customize them and control their access inside secure “sandboxes.”
Huang suggested openness makes AI more secure, not less, because outside researchers can inspect the models, expose weaknesses and build defenses.
“If everything just becomes one single model, one single point of attack, one single source of failure, I think the world is much, much more vulnerable,” he said.
OpenAI President Says Kimi K3 ‘Pretty Good,’ Unsure If Distilled - Bloomberg
“It’s a pretty good model,” Brockman said in an interview on Tuesday, referring to the release days earlier of Moonshot’s more advanced Kimi K3. “There’s no question about it.”
The OpenAI co-founder said it’s “too early” to tell whether Moonshot may have illicitly extracted results from OpenAI’s models to improve its own through a process known as distillation. “This is something we do always monitor for,” he said.
AI Under Heaven—01 - by Alex Colville
New newsletter on China AI by Colville, Australian Strategic Policy Institute (ASPI)
In his speech, Xi did not mention “open-source” per se, but instead a four-character political slogan, “open source and openness” (开源开放).
The slogan itself first appears along with the first official Chinese policy document on AI from 2017, which sketches out China’s international policy for the technology, and seems to be a broad term referring to sharing any research or technology that could contribute to China’s AI development. It is still interpreted this way by state media: Xinhua used it in March to talk about open-sourcing AI chip architecture.
So what Xi promised in his WAIC speech actually has more to do with the idea of open-source, rather than specifically guaranteeing frontier AI models will always be open-source. They may be part of it, but I would argue the term is broad and vague enough to allow for frontier AI models to be taken off the table should the need arise.
5. H1 fiscal revenue and expenditure data
Ministry of Finance - Fiscal Revenue and Expenditure in the First Half of 2026 - Translation
In the first half of the year, national general public budget revenue was 12.1047 trillion yuan, up 4.7% year-on-year. Of this, national tax revenue was 9.7865 trillion yuan, up 5.3% year-on-year; non-tax revenue was 2.3182 trillion yuan, up 2.3% year-on-year. Broken down by central and local government, central general public budget revenue was 5.224 trillion yuan, up 7.5% year-on-year; local general public budget revenue at the local level was 6.8807 trillion yuan, up 2.7% year-on-year.
上半年，全国一般公共预算收入121047亿元，同比增长4.7%。其中，全国税收收入97865亿元，同比增长5.3%；非税收入23182亿元，同比增长2.3%。分中央和地方看，中央一般公共预算收入52240亿元，同比增长7.5%；地方一般公共预算本级收入68807亿元，同比增长2.7%。
China Cuts Government Spending 11.9% in June as Fiscal Tightening Deepens - Bloomberg
China’s public spending plunged last month by the most since October, suggesting the government tightened fiscal policy further despite increasing calls for more support as economic growth slips.
Economists see fiscal policy stepping up in H2, with infrastructure support and incremental measures expected 专家研判下半年财政将加力：基建托底与增量政策可期 Yicai 第一财经 · July 21, 2026 · Chen Yikan 陈益刊
Economists interviewed by Yicai expect a heavier fiscal push in the second half after growth slowed from 5% in the first quarter to 4.3% in the second, with first-half growth at 4.7%. Standard Chartered’s Ding Shuang says spending was front-loaded into Q1 and then tightened: in April and May combined, general public budget revenue rose 6.6% year-on-year against a full-year target of 2.2% while spending fell 2.4% against a 4.4% target, and the broad deficit for those two months was the smallest for the period in three years. Broad fiscal spending fell 0.3% in the first five months. Yuekai Securities’ Luo Zhiheng attributes the dip to timing and the property adjustment rather than weaker policy. CCXI’s Yuan Haixia expects incremental measures in September or October, after the late-July Politburo meeting.
Yicai - Broad Fiscal Spending Topped 18 Trillion in H1, With More Room to Step Up in H2
Tang Zaifu, deputy director of the Ministry of Finance’s Budget Department, said at the press conference on first-half fiscal figures that, judging from first-half implementation, all fiscal policies are progressing smoothly and have played a positive role in guaranteeing the implementation of major national strategic tasks, safeguarding and improving people’s livelihoods, and promoting the stable operation of local finances. Next, the ministry will continue to implement the more proactive fiscal policy well — for example, pushing established policies to be implemented, reasonably accelerating the pace of fund use, continuing to support the expansion of effective investment, tapping consumption potential, strengthening livelihood guarantees, and promoting stable operation of grassroots finances.
财政部预算司副司长唐在富在上半年财政收支新闻发布会上表示，从上半年执行情况看，各项财政政策进展顺利，在保障国家重大战略任务落实、保障和改善民生、促进地方财政平稳运行等方面发挥了积极作用。下一步财政部将继续实施好更加积极财政政策，比如推动各项既定政策落地实施，合理加快资金使用进度，持续支持扩大有效投资，挖掘消费潜力，强化民生保障，促进基层财政平稳运行。
Yica - Understanding H1 National Fiscal Data in One Article: Revenue Growth Now in Sync with Economic Growth
Taxes are called the “barometer of the economy.” Ministry of Finance data show that tax revenue within national general public budget revenue was about 9.8 trillion yuan in the first half, up 5.3% year-on-year — markedly higher than last year’s full-year growth (0.8%) and the same period last year (-1.2%). Steady tax growth also reflects stable economic performance.
税收被称为“经济晴雨表”。财政部数据显示，今年上半年全国一般公共预算收入中的税收收入约9.8万亿元，同比增长5.3%。这一增速明显高于去年全年（0.8%）和去年同期（-1.2%）。税收稳定增长，也折射出经济运行稳定。
Looking at the main tax categories, domestic VAT — the largest tax — kept growing in the first half (6%), driven mainly by continued growth in industry and services and rising producer prices. The second-largest tax, corporate income tax, also grew (3.9%), which is tied to growth in corporate profits...
从主要税种来看，上半年第一大税种国内增值税保持增长（6%），这主要受工业服务业持续增长、工业生产者出厂价格上行等带动。第二大税种企业所得税也实现增长（3.9%），这也与企业利润增长有关。
Individual income tax grew rapidly in the first half (13.1%), returning to the position of third-largest tax. Huang Lixin, director of the Tax Science Research Institute of the State Taxation Administration, said earlier that the fast growth in individual income tax revenue this year has three main causes: first, an active capital market has driven high-speed growth in related income categories; second, tax payments in some industries have grown quickly; and third, tax authorities’ continued efforts to guide and regulate tax compliance by high-income individuals have added revenue.
今年上半年个人所得税保持较快增长（13.1%），重新回到第三大税种位置。国家税务总局税收科学研究所所长黄立新此前表示，今年以来个人所得税收入增长较快主要有三个原因：一是资本市场活跃带动相关所得项目高速增长；二是部分行业缴税增长较快；三是税务机关持续加强高收入人员纳税引导规范带来增收。
Securities Times - H1 Fiscal Spending Topped 14 Trillion Yuan! Priority Support for Livelihood and Science & Technology Areas
In the first half of this year, China’s fiscal operations were generally stable, revenue grew steadily, and spending was generally front-loaded. First-half 2026 fiscal data released by the Ministry of Finance on July 22 show national general public budget revenue of 12.1 trillion yuan, up 4.7% year-on-year, with the cumulative growth rate rising month by month; national general public budget expenditure was 14.33 trillion yuan, up 1.5% year-on-year, maintaining the necessary spending intensity...
今年上半年，我国财政运行总体平稳，收入实现平稳增长，支出总体保持靠前发力。财政部7月22日公布的2026年上半年财政收支数据显示，上半年全国一般公共预算收入为12.1万亿元，同比增长4.7%，累计增幅逐月提高；全国一般公共预算支出为14.33万亿元，同比增长1.5%，保持必要支出力度。
Judging from fiscal policy implementation, all fiscal policies progressed smoothly in the first half, playing a positive role in advancing major national strategic tasks, safeguarding and improving people’s livelihoods, and promoting stable operation of local finances. By the end of June, 9.4 trillion yuan of central transfer payments to localities had been allocated — 90.3% of the initial annual budget, 0.5 percentage points faster than the same period last year.
从财政政策执行情况看，上半年各项财政政策进展顺利，在推动国家重大战略任务落实，保障和改善民生，促进地方财政平稳运行等方面发挥积极作用。截至6月末，中央对地方转移支付已下达9.4万亿元，占年初预算的90.3%，下达进度较上年同期提高0.5个百分点。
Recently, some media reported that in the first quarter of 2026 every province’s fiscal self-sufficiency rate was below 100%, with no province achieving fiscal self-balance — content that triggered market misreadings. Tang Zaifu offered a clarification at the press conference.
近期，有媒体反映2026年一季度所有省份的财政自给率低于100%，无一省份实现财政自平衡，相关内容引发市场误读。对此，唐在富在发布会上作出澄清。
Tang Zaifu noted that the fiscal self-sufficiency rate is the ratio of a region’s general public budget revenue to its general public budget expenditure. Under China’s budget system, the sources of local general public budget spending include not only a locality’s own general public budget revenue but also transfer payments from higher levels, funds transferred in from the government fund budget and the state capital operations budget, and carryover balances from the prior year.
唐在富指出，财政自给率是指一个地区一般公共预算收入与一般公共预算支出的比值。按照我国预算制度，地方一般公共预算支出来源中，除自身一般公共预算收入外，还包括上级转移支付、从政府性基金预算和国有资本经营预算调入资金、使用上年结转结余等。
“Since local general public budget revenue is only one source of spending, a fiscal self-sufficiency rate below 100% is the norm. Even though local fiscal self-sufficiency rates are below 100%, the central government has increased transfer payments to localities, so local finances can achieve balance between revenue and expenditure,” Tang said.
“由于地方一般公共预算收入只是支出的来源之一，财政自给率低于100%是常态。尽管地方财政自给率低于100%，但中央财政加大了对地方的转移支付力度，地方财政可以实现收支平衡。”唐在富说。
中国财政“半年报”：印花税暴增97%，“投资于人”支出持续增长 - 经济观察网 － 专业财经新闻网站
Economic Observer- China’s Fiscal “Half-Year Report”: Stamp Duty Surges 97%, “Investing in People” Spending Keeps Growing
On July 22, the Ministry of Finance held a press conference on fiscal revenue and expenditure in the first half of 2026.
7月22日，财政部召开2026年上半年财政收支情况新闻发布会，介绍2026年上半年财政收支情况。
Ministry data show first-half national general public budget revenue of 12,104.7 billion yuan, up 4.7% year-on-year, and expenditure of 14,332.9 billion yuan, up 1.5%.
财政部数据显示，上半年，全国一般公共预算收入121047亿元，同比增长4.7%；支出143329亿元，同比增长1.5%。
Wang Zhenyu, dean of the Local Public Finance Research Institute at Liaoning University, analyzed that the data show general public budget revenue in recovery-driven growth, with revenue from the main tax categories trending healthy while property-related taxes fell short of expectations. He believes that in the second half, China should continue to implement a proactive fiscal spending policy, ensure the necessary spending intensity, and exercise counter-cyclical adjustment.
辽宁大学地方财政研究院院长王振宇分析，从数据来看，一般公共预算收入在恢复性增长，主体税种收入增长趋于良性，涉及房地产的税收不及预期。他认为，下半年，要继续实施积极的财政支出政策，确保必要的支出强度，发挥逆周期的调节作用。
Within the government fund budget, revenue from the transfer of state-owned land use rights was 977.8 billion yuan, down 31.5% year-on-year in the first half — the biggest first-half decline in nearly a decade...
政府性基金预算中，国有土地使用权出让收入9778亿元，上半年同比下降31.5%，这一降幅创下近十年上半年同期历史新高。
Business, Economy and Trade
CSRC - Chairman Wu Qing Meets John Graham, President and CEO of Canada Pension Plan Investment Board - Translation Wu Qing said that amid a complex and volatile international situation, China’s economy has run generally steadily in the first half of this year, maintained a trend of developing toward the new and the better, and demonstrated resilience and vitality. The CSRC will adhere to seeking progress while maintaining stability, resolutely safeguard the stable and healthy operation of the capital market, steadily expand high-standard institutional opening, and continue to improve the convenience of foreign participation in the capital market. International institutional investors, including CPPIB, are welcome to expand their investment in China and share in the dividends of China’s economic and capital market reform and development. 吴清表示，在复杂多变的国际形势下，今年上半年中国经济运行总体平稳，保持向新向优发展态势，展现出韧性与活力。中国证监会将坚持稳中求进，坚决维护资本市场平稳健康运行，稳步扩大高水平制度型开放，持续提升外资参与资本市场的便利度。欢迎包括加拿大养老基金投资公司在内的国际机构投资者扩大对华投资，共享中国经济和资本市场改革发展红利。
Wednesday markets not impressed with the Tuesday meeting comments:
