〔Day Digest〕40-Year Mortgages, Five Arrows, 1.69% 10Y — and a 22% Bank Profit Share: Stimulus Stretched Against Earnings Fragility

0. Weekly Arc

The week closed on a property-policy surge: mortgages can now stretch to 40 years maximum, the CSRC backs M&A restructuring of listed developers, the housing provident fund was re-tuned, and a dedicated "urban renewal project loan" was added — the "five arrows" fired in a single window ^[1][2][3]. Yet the macro soil is thin: 1-7 real estate FAI is -19.2% y/y ^[3], and a tightening on pre-sale disbursement (mortgage only after project completion filing) shows policy is reaching for the demand side while tying the supply side ^[4]. Net: easing stretched against a market that is not yet de-stocking ^[3][4].

1. Property: Termed Out, Not Turned

• **[NEW] Mortgage reset to 40 years:** PBoC and the Financial Regulatory Bureau extended the maximum individual mortgage term from 30 to 40 years on August 28 ^[1]. China Construction Bank opened existing-customer applications the same day; extensions are capped at half the original term and at 40 years total (a 30-year loan can extend by up to 10 years; a 10-year loan by up to 5) ^[5].
• **[NEW] Supply-side brake on pre-sale:** the same package ties pre-sale mortgage disbursement to completion filing with authorities — a tightening that runs against the demand-side easing ^[4].
• **[NEW] Existing-home push:** Sina's broker weekly notes existing-home sales are being accelerated alongside the term extension ^[3].
• **[NEW] Urban renewal loan:** two ministries guided financial institutions to set up a dedicated "urban renewal project loan" product as part of the financing suite ^[2].
• **[NEW] CSRC and provident fund:** the CSRC supports M&A restructuring of listed developers; the housing provident fund was re-tuned ^[1][3].
• **[ESCALATED] Five arrows framework:** the Financial Regulatory Bureau's "five arrows in concert" financing system anchors the package; the broker weekly reads this as policy entering through the financing channel rather than direct demand stimulus ^[3].

2. Industry and Rates: Profits Up, Yields Down

• **[NEW] July industrial profits +11.2% y/y:** per the CICC weekly, revenue fell and costs rose, jointly dragging the pace; high energy prices are transmitting from upstream to downstream manufacturing, while weak domestic demand compressed the top line ^[6]. Sina's broader weekly tags 1-7 housing FAI at -19.2% y/y as the structural drag ^[3].
• **[NEW] Anhui run-rate, 1-7:** industrial revenue 3,725.73bn yuan (+17.6%), cost 3,227.32bn (+16.2%), profit 195.91bn (+63.5%); cost per 100 yuan of revenue 86.62 yuan; receivables 1,635.85bn (+25.6%); finished-goods inventory 310.74bn (+19.6%) ^[7]. Anhui is a useful regional pulse but a single-province data point ^[7].
• **[ONGOING] Rates, no cut:** the 7-day reverse repo rate has not been cut in 2026; the 10Y CGB yield is 1.69% (up 1bp this week, down 15bp YTD) ^[3][8]. CICC frames this as a "no-cut rally" — rate-cut expectations, not OMO easing, are doing the work ^[8].
• **[ONGOING] Equity cross-currents:** CSI300 -0.21% this week, CSI300 futures +0.32%; Sina's weekly keeps the asset preference order stocks > commodities > bonds > cash ^[3]. ETF flow tilt: broad scale-index ETFs +72.49bn yuan, cross-border theme -112.67bn; share changes led by semiconductor materials +2.232bn shares, securities -5.185bn ^[9].
• **[NEW] Data-economy pilots:** National Data Bureau chief Liu Liehong flagged "token value-added subscription" and "pay-for-effect" commercial models at the 2026 China International Big Data Industry Expo, with a new round of data-labeling pilots in 32 cities spanning industrial manufacturing, healthcare, and transport ^[10].

3. The Banking Paradox

• **[NEW] Global Bank 1000 2026:** Chinese banks hold 4 of the top 5, 7 of the top 10, and 11 of the top 30 slots — accounting for 34% of Tier 1 capital and 41% of assets in the Top 1000, but only 22% of profits ^[11]. The Banker framed the survey as "China's Fragile Rise" ^[11].
• **[NEW] Comparison anchor:** U.S. banks hold 16% of Tier 1 capital and 14% of assets in the same ranking ^[11]. The gap between China's capital share (34%) and profit share (22%) is the standout; treat the headline as single-sourced via a WeChat reprint of The Banker ^[11].

4. What Decides Next Week

• **[NEW] China August official manufacturing PMI:** prints first; July was 49.2 in contraction and the CICC view flags "insufficient effective demand" as the main contradiction ^[12][3].
• **[NEW] U.S. August nonfarm payrolls:** prior month -23k (year-to-date worst); consensus +55k — the last jobs print before the FOMC ^[12].
• **[NEW] Fed Governor Waller speech:** described by the calendar as potentially the most important official speech before the September decision, possibly outweighing Chair Warsh's Jackson Hole ^[12][6].
• **[NEW] G20 finance and tech ministers:** back-to-back in the U.S.; Musk, Jensen Huang, and Sam Altman at the tech track as the Trump administration pushes "Carolina Principles" on light-touch AI regulation; Treasury Secretary Bessent may warn on Iran sanctions compliance ^[12].
• **[NEW] Earnings:** Broadcom (AI proxy) and Zhipu on the calendar ^[12].
• **[NEW] Korea August semiconductor exports:** a high-frequency read on AI demand ^[12].

5. Source Quality and Caveats

The property policy cluster is cross-checked across at least two outlets (PBoC/FRB notification, CCB implementation, Sina and Caixin weeklies) ^{[5][1][2][3][4]}. The 22% bank profit-share figure derives from a WeChat-syndicated reprint of The Banker's Top 1000 survey; flag as single-sourced on the exact percentage ^[11]. The GeLong essay on stock-vs-interbank liquidity ^[13] is a single-source analytical post; use as commentary, not fact. The CICC weekly on industrial profits and the Sina broker weekly both anchor the rates/asset data, but the property policy interpretations diverge in framing (broad easing vs demand-side stretch with supply-side brake) ^[3][8][6][4] — contradiction is content.