Listed companies play an important role in optimizing resource allocation, advancing industrial upgrading, and driving scientific and technological innovation. The statutory deadline for disclosure of listed companies’ semi-annual reports is August 31. Judging from publicly available financial and tax data, China’s A-share listed companies delivered sound, innovative and improved development momentum in the first half of 2026. Their compliance management capability has kept improving, and awareness of tax law compliance has risen markedly, laying a solid foundation for long-term healthy development.

Listed Companies Show Multiple Sound Development Trends

Since the start of this year, as a series of China’s macro policies have continued to deliver results, new quality productive forces have grown at an accelerated pace and the foundation of the real economy has been consolidated, A-share listed companies have maintained a sound development momentum.

— Dual growth in operating revenue and net profit reflects robust overall performance. In H1, A-share listed companies (including their subsidiaries, same below) posted operating revenue of RMB 37.76 trillion and net profit of RMB 3.58 trillion, up 7.6% and 19.5% year-on-year respectively. Over 60% of the firms achieved revenue growth, and more than 70% turned profitable, with operating vitality continuously unleashed. Among them, private listed companies saw operating revenue and net profit rise by 12.7% and 29.6% year-on-year, representing a notable improvement in business conditions. The aggregate net cash flow from operating activities of listed companies reached RMB 8.94 trillion, a year-on-year increase of 20.2%, indicating steady improvement in the quality of earnings.

— Innovation-driven industrial upgrading is advancing in depth, fueling new growth drivers. In H1, listed companies invested a total of RMB 847.3 billion in research and development, up 3% year-on-year. R&D investment has continuously boosted endogenous innovation capacity. A total of 1,668 national-level specialized, sophisticated, unique and innovative listed companies generated operating revenue of RMB 7.84 trillion, rising 10.8% year-on-year; their net profit climbed 18.6% year-on-year, with 78.4% of them making profits. High-tech manufacturing has become a key engine of growth. In particular, high-tech manufacturing sectors including electronics, power equipment, computer and communications recorded combined operating revenue of RMB 7.05 trillion, a year-on-year jump of 21.8%, and net profit surged 76.3% year-on-year.

— Market capitalization keeps expanding with a marked enlargement of leading enterprises. Alongside the steady development of listed companies, their value creation capacity has won growing market recognition. In H1, the total market capitalization of A-shares rose to RMB 118.95 trillion, up 9.41% from the end of last year. The cohort of leading enterprises expanded significantly: the number of firms with a market cap exceeding RMB 100 billion reached 206, an increase of 39 from the end of last year and 81 from the same period a year earlier. Hard-core technologies represented by optical modules, semiconductors and AI servers serve as the core driver behind the rapid expansion of RMB 100-billion market-cap companies.

— Fulfill social responsibilities in accordance with law, maintaining stable tax contributions. Listed companies actively fulfill tax payment obligations and make important contributions to national fiscal capacity and economic and social development. According to public financial data of listed companies, A-share listed companies paid a total of RMB 2.53 trillion in various taxes and fees in H1, up 4.5% year-on-year. Although the growth rate was 3.1 and 15 percentage points lower than that of operating revenue and net profit respectively, the overall tax burden (taxes and fees paid as a share of operating revenue) edged down by 0.2 percentage points year-on-year to 6.7%. Even so, tax payments by A-share listed companies accounted for nearly 26% of tax revenue collected by tax authorities, a level largely stable since 2023.

Continuous Improvement of Listed Companies’ Compliance Management

Since the beginning of this year, under the active guidance of multiple authorities, listed companies have proactively strengthened regular internal compliance management. Their compliance awareness, especially tax law compliance, has been steadily enhanced, and willingness to disclose tax-related matters has increased noticeably.

— Listed companies take initiative to strengthen regular compliance management. As the backbone of the market economy, high-quality development of listed companies is reflected not only in operating performance but also embedded throughout standardized management and risk prevention. China’s listed companies have actively improved systems for tax compliance and payment, voluntarily carried out tax compliance risk inspections, and promptly adjusted discrepancies between tax rules and financial accounting in accordance with law to guard against risks in the application of tax policies. In particular, given the long industrial chains and diverse business forms of hundreds of thousands of their subsidiaries, many listed companies have prioritized lifting the compliance management level of member enterprises under their umbrella to timely prevent and defuse potential tax-related risks.

Tax-related announcements released by listed companies this year show that more than 70% stemmed from self-inspection, rectification and supplementary tax payment, and over two-thirds were disclosures triggered by tax adjustments of their subsidiaries. An analysis of the reasons for supplementary tax payments falls into four main categories: first, incorrect application of preferential tax policies, accounting for roughly 40% of cases, such as improper enjoyment of high-tech enterprise tax incentives; second, lax internal tax control within groups, exceeding 30%, for instance failure to make tax adjustments for related-party transactions as required; third, oversights in tax declarations, accounting for around 20%, such as failure to declare taxable local subsidies that do not qualify for non-taxable treatment; fourth, irregular invoice deductions, taking up about 5%, including receipt of falsely issued invoices from partner enterprises.

— Market recognition of compliance management has markedly improved. As the concepts of rule of law and fairness take deeper root in society, the market has formed an initial consensus that while compliance management may bring short-term pains to enterprises, it helps clear up legacy issues and latent risks in the medium and long run. Judging from market responses to supplementary tax announcements, investor sentiment has shifted from excessive concern in the past to rational assessment. Among listed companies releasing tax-related announcements between 2025 and 2026, around 60% saw no sharp stock price swings on the announcement day or the next trading day, and over 40% registered market cap gains within the month. This demonstrates that enterprises’ voluntary supplementary tax payment and rectification have gained market recognition.

Zhang Wei, Dean of the School of Taxation at Jilin University of Finance and Economics, holds that supplementary tax payment is essentially a one-off adjustment and a regular compliance practice of enterprises. It does not undermine business fundamentals and helps eliminate hidden risks to support sound long-term corporate development.

— Multiple authorities work together to foster a law-based and fair business environment. In recent years, China’s business environment has kept improving toward the goal of rule of law and fairness. Upholding the philosophy that “the rule of law constitutes the best business environment”, tax authorities treat all market entities equally. By rolling out the Foundation Strengthening Initiative for tax collection and administration, they embed compliance management into daily routines in accordance with law, fully leverage tax big data, and adopt persuasive guidance methods such as risk reminders for most listed companies. This encourages listed companies to fulfill their duty of tax payment in good faith and sets an example for other market entities to operate compliantly and abide by tax laws. In the first eight months of 2026, the number of listed companies subject to compliance management via tax audits dropped by 6.7% year-on-year.

Tang Jiqiang, Professor at the Institute of Chinese Financial Studies, Southwestern University of Finance and Economics and Chief Economist of the SWUFE Think Tank, notes that the refined information disclosure regime is another factor behind the rising number of tax-related announcements by listed companies. The revised Measures for the Administration of Information Disclosure by Listed Companies issued by the CSRC further strengthens listed firms’ obligation to disclose risks, requiring full and timely disclosure of risk matters that may exert material impacts on corporate operations and financial conditions. “Some listed companies made supplementary tax payments in previous years without public disclosure. Improvements to information disclosure rules have directly made tax supplement matters transparent, helping better guide law-abiding and compliant operations,” said Tang Jiqiang.

“Listed companies play an important role in serving economic and social development and improving people’s wellbeing,” said an official from relevant departments of the State Taxation Administration. Tax authorities will continue tax collection and administration in accordance with law, actively foster a tax ecosystem featuring compliant operation and honest tax payment, fully implement tax and fee preferential policies, and strictly standardize tax inspections targeting enterprises. They will seriously investigate and penalize tax violations while firmly preventing excessive tax collection. Tax authorities will also help taxpayers identify and resolve tax risks, strive to build a law-based and fair tax business environment, and support market entities including listed companies to achieve more robust development through compliant operations.

Source: Shanghai Securities News