Heilongjiang Agriculture Co Ltd

The Chinese government, under President Xi Jinping, is pursuing a major campaign to collect back taxes from the business sector. In the first half of 2026, over 100 listed companies were collectively charged 7.7 billion yuan, or about 1.1 billion US dollars, which exceeds the total for the 14 years since Xi Jinping came to power in 2012. One of the hardest-hit companies is Heilongjiang Agriculture Co., which is expected to post its first loss in over 20 years after being hit with back taxes amounting to 120% of its 2025 net profit, causing its stock price to fall by the 10% daily limit for two consecutive days. This tax collection reflects the fiscal pressure on local governments in China, as revenue from taxes and land sales has declined. It also signals that China is moving away from the model of using tax incentives to attract investment, with the Golden Tax IV system linking tax data with various agencies, making it easier to detect underpayment of taxes. Meanwhile, the government is signaling a review of outdated tax incentives and gradually reducing benefits in several industries, such as lowering export tax rebates for solar cells and batteries, and halving tax incentives for new energy vehicles.