〔Overnight Brief〕Anti-Involution Moves to Institutional Phase, PBOC Injects ¥1 Trillion; Mortgage Rates Enter '2% Range' Debate

Policy: Anti-Involution and Institutional Governance

• After the Politburo first proposed preventing 'involution-style' vicious competition in July 2024, governance has evolved from industry self-discipline to a comprehensive framework combining institutional rules, industry standards, and enforcement ^[1].
• The July 2026 Politburo meeting stressed 'continuing comprehensive rectification of involution-style competition' and emphasized formulating and implementing regulations for building a unified national market, which experts say will usher in a critical stage of long-term institutional governance ^[1].
• Five national-level economic development zones – Guangdong Jiedong, Henan Puyang, Inner Mongolia Hulunbuir, Liaoning Yingkou, and Heilongjiang Daqing – were removed from the national list due to poor performance evaluations, reflecting a dynamic exit mechanism established by the Ministry of Commerce ^[2].
• Guangdong adjusted minimum wages effective September 1, 2026: Guangzhou to ¥2,680/month and Shenzhen to ¥2,700/month, with lower tiers for other cities ^[3].

Monetary and Liquidity: PBOC Injection, Deposit and Mortgage Rates

• The PBOC announced a ¥1 trillion six-month outright reverse repo operation for August 14 to keep bank system liquidity ample ^[4][5].
• Four state-owned large banks restarted sales of five-year large-denomination certificates of deposit, with the highest annual rate at 1.6%, seeking to lock in long-term funds and offset pressure from maturing deposits; industry insiders view this as a temporary measure in a rate-down cycle, not a signal of a deposit-rate bottom ^[6].
• The recent appearance of existing mortgage rates below 3% is not widespread: it mainly affects existing loans where borrowers once negotiated large LPR markdowns, while newly issued loans generally remain above 3%, with only a few foreign banks in certain cities offering sub-3% rates under strict credit requirements ^[7]. Mortgage rates are now marketized with no national policy floor, and regional differences are considered normal given local conditions ^[7].
• DeepSeek announced API price adjustments effective August 17, adopting peak-valley pricing with a maximum output price of ¥27 per million tokens ^[8][4][5].

Trade and Industry: Records and Structural Shifts

• Suzhou Industrial Park's foreign trade in the first seven months of 2026 reached ¥1.02 trillion, up 126.8% year-on-year, already exceeding the full-year 2025 level; high-tech products including smart robots rose 189.9%, while memory chips and optical modules – AI hardware categories – more than doubled to over ¥620 billion ^[9].
• In July, new energy vehicles accounted for more than 60% of new car sales for the first time ^[10].
• Shanghai Electric's overseas subsidiary issued a ¥1.5 billion three-year free trade offshore bond at a 1.8% coupon, marking the world's first corporate free trade offshore bond, the first such bond listed on the Hong Kong Stock Exchange, and the largest single issuance in the free trade offshore bond market ^[11][12].
• The national carbon emissions trading market's cumulative trading volume exceeded 900 million tons ^[13].
• Haikou Customs issued 15,588 certificates of origin in January–July, up 76.14% year-on-year, with total value of ¥7.597 billion, up 47.89% ^[14].
• From August 14, 2026, China will continue to levy anti-dumping duties on single-mode fiber originating from India for five years ^[4].

External Context: Fed Divergence and Treasury Auction Signals

• Richmond Fed President Barkin argued for holding rates steady, citing shocks that 'should fade' such as tariffs and oil prices, while Cleveland Fed President Hammack reaffirmed her case for a hike, saying 'I think we need to act now' ^[15].
• The US 30-year Treasury auction saw a high yield of 5.216%, the highest since 2001, with a small 'tail' indicating demand slightly weaker than expected; the 10-year auction earlier in the week also posted its highest yield since 2007 ^[16].
• US initial jobless claims rose by 9,000 to 209,000 in the week ending August 8, above the forecast of 202,000, though the four-week moving average held at 199,000, suggesting resilience ^[17].
• The two-year US Treasury yield continued falling, touching a low since mid-July, down 6.2 basis points to 4.136% ^[18]. US stocks rose as July PPI pointed to cooling inflation, with the S&P 500 closing at a record high and the Nasdaq up 0.81% ^[8].