New data from China's tax authorities shows private sector vitality, green industry acceleration, and signs of deeper international integration — with actionable insights for global advisors and investors.

China has crossed a major threshold in its business landscape: as of June 2025, over 100 million business entities are now active taxpayers, according to the State Taxation Administration (STA). That's a net gain of 30 million since 2020 — a sharp increase that outpaces most economies globally and signals the country's expanding entrepreneurial base.

For foreign firms—particularly in legal, consulting, finance, and logistics—this scale translates into a vast and diversifying client ecosystem. Whether supporting foreign-invested firms or advising domestic startups going global, the opportunity set is becoming broader and deeper.

STA Director Hu Jinglin noted that China's total tax revenue during the 14th Five-Year Plan period (2021–2025) is projected to exceed 85 trillion yuan (approx. USD 11.89 trillion), up 13 trillion yuan from the previous five-year cycle. But beneath the headline growth lies a far more telling signal: how much tax revenue has not been collected—deliberately.

From 2021 to 2025, China delivered an estimated 10.5 trillion yuan (USD 1.47 trillion) in tax and fee reductions to support businesses and individuals. This was not blanket relief—it was policy with a clear focus:

• 3.6 trillion yuan went to technological innovation and advanced manufacturing;

• 7.2 trillion yuan supported private enterprises, including sole proprietors;

• 6.3 trillion yuan aided small and medium-sized businesses.

These numbers reveal more than generosity—they reflect priorities. In particular, the government is actively boosting innovation capacity and SME resilience, areas where foreign investors, venture capital firms, and tech transfer partners can find fertile ground.

The outcomes speak for themselves:

• High-tech industries recorded 13.9% average annual sales growth in recent years;

• In H1 2025, private firms accounted for 71.7% of national sales revenue—up 2.8 percentage points from 2020.

For cross-border professionals, these trends offer cues on where China's real growth momentum lies—and where international participation may be most welcome.

While carbon-intensive sectors still dominate globally, China’s clean energy industries are catching up fast. Between 2021 and 2024, sales revenues in wind, solar, and hydropower grew by an average of 13.1% per year, indicating meaningful strides toward a lower-carbon economy.

These figures suggest a maturing renewable sector with commercial viability—an increasingly relevant data point for infrastructure investors, ESG-focused funds, and global energy players evaluating their China footprint.

At the same time, China’s tax authorities recovered 571 billion yuan in tax losses through enforcement from 2021 to 2025. This dual focus—on growth and compliance—underscores the importance of smart structuring and tax risk management for foreign firms operating in China or engaging with Chinese partners.