Core Viewpoint - The article focuses on the concept of "anti-involution" across various industries, emphasizing that the framework is still being refined and may require further input from industry associations and relevant departments [2][3]. Group 1: Historical Context of Anti-Involution - The first positioning of anti-involution is to serve high-quality development and enhance industrial competitiveness, integrating the strategy of expanding domestic demand with supply-side structural reforms [5][11]. - The second positioning is to support the construction of a unified national market, facilitating domestic circulation, with various measures already implemented to promote this goal [6][13]. Group 2: Future Outlook on Anti-Involution - The article outlines three reasons why the current anti-involution efforts are not urgent: differing goal orientations compared to previous supply-side reforms, varying employment constraints, and differing micro-profit pressures [7][17][18]. - Multiple sectors may be involved in anti-involution efforts, including new energy vehicles, photovoltaic, lithium batteries, electronics, chemicals, and civil aviation [22]. - The implementation of anti-involution is expected to occur in three phases: 1. Phase one focuses on regulating corporate and government behavior to maintain fair market competition [26][28]. 2. Phase two involves market-based methods such as mergers and acquisitions to eliminate ineffective production capacity [30]. 3. Phase three may introduce more explicit "hard targets" to resolve supply-demand conflicts if previous phases do not yield results [32][33]. Group 3: Mechanisms for Implementing Anti-Involution - The article discusses the need for corporate behavior regulation, highlighting relevant laws and regulations aimed at promoting product quality and fair competition [35][36]. - Government behavior must also be regulated, with various policies in place to ensure fair competition and prevent local protectionism [38][39]. - Supply-side measures will focus on enhancing standards to force the exit of outdated production capacity, with specific deadlines set for compliance in various industries [40].

Core Viewpoint - The inflation data for June shows a divergence between CPI and PPI, with CPI rising slightly while PPI continues to decline, indicating a complex interplay of commodity prices and domestic demand [2][8][69]. Group 1: Divergence in Commodity Prices - In June, PPI fell by 0.3 percentage points to -3.6% year-on-year, primarily due to falling prices of upstream commodities like coal and steel, while CPI rose by 0.1% year-on-year, supported by strong food prices and precious metals [2][9][69]. - The decline in PPI was influenced by oversupply in sectors such as steel, cement, and coal, which contributed to a 0.4% month-on-month drop in PPI, while rising international oil prices provided some support [2][9][69]. - Food prices, particularly fresh vegetables and beef, saw significant increases, with fresh vegetable prices rising by 7.9 percentage points to -0.4% year-on-year, contributing positively to CPI [12][47][69]. Group 2: Core Commodity PPI and CPI Trends - Core commodity PPI remains at historical lows, reflecting the impact of tariffs and low capacity utilization in domestic industries, with a slight recovery of 0.4 percentage points to -1% year-on-year [3][21][70]. - The decline in prices for industries with high export ratios, such as computer communications and electrical machinery, indicates ongoing price pressures [21][70]. - Conversely, core commodity CPI increased by 0.3 percentage points to 0.6% year-on-year, driven by consumer stimulus policies, with notable price increases in durable goods and household textiles [27][70]. Group 3: Service CPI and Housing Market - Service CPI remained stable at 0.5% year-on-year, with core service CPI also holding steady at 0.8% [30][61][71]. - The rental component of the service CPI showed weakness, with a month-on-month increase of only 0.1%, below the historical average [30][71]. - The overall stability in service demand contrasts with the weaker performance of housing-related costs, indicating potential challenges in the housing market [30][71]. Group 4: Future Outlook - The combination of policy measures and recovery in domestic demand is expected to alleviate inflationary pressures, although significant downward pressure on commodity prices is anticipated in the second half of the year [35][70]. - Factors such as tariff disruptions, low global oil inventories, and weakened investment in real estate and manufacturing are likely to constrain commodity prices further [35][70]. - The low capacity utilization in downstream sectors poses challenges for PPI recovery, suggesting that PPI will likely remain weak compared to CPI in the coming months [35][70].

Group 1: Inflation Data Overview - In June, the CPI increased by 0.1% year-on-year, compared to a previous value of -0.1% and an expectation of 0%[8] - The PPI decreased by 3.6% year-on-year, down from a previous value of -3.3% and below the expected -3.2%[8] - Month-on-month, the CPI fell by 0.1%, while the PPI decreased by 0.4%[8] Group 2: Price Divergence Analysis - Commodity prices for upstream coal and steel fell, negatively impacting the PPI, while food and platinum prices rose, supporting the CPI[2] - The core PPI remains at historical lows, reflecting tariff impacts and low capacity utilization in downstream industries, with a core PPI of -1%[21] - Core CPI rose by 0.3 percentage points to 0.6%, driven by consumer stimulus policies and increased domestic demand[3] Group 3: Service Sector Insights - The service CPI remained stable at 0.5% year-on-year, with core service CPI unchanged at 0.8%[50] - Rent CPI showed weakness, with a month-on-month increase of only 0.1%, below the historical average of 0.2%[25] Group 4: Future Outlook - Policy measures and recovery in domestic demand are expected to alleviate inflationary pressures, but commodity prices may face downward pressure in the second half of the year[27] - The PPI is anticipated to underperform compared to the CPI due to ongoing low capacity utilization and external factors such as tariffs and global oil supply constraints[27]

Core Viewpoints - The improvement in consumer demand stabilizes the core CPI, but supply-side factors significantly suppress inflation readings [2][68] Group 1: Characteristics of Core CPI Stabilization - Characteristic 1: Core commodity PPI shows a notable rebound, primarily due to improved demand and a lack of further tariff impacts. In May, the core commodity PPI increased by 0.3 percentage points to -1.4%. This is attributed to the sustained effects of consumption-boosting policies and a moderation in tariff impacts on prices [2][68] - Characteristic 2: Consumption promotion policies combined with rising gold prices lead to an increase in core commodity CPI. In May, the core commodity CPI rose by 0.1 percentage points to 0.2%, supported by increased consumer demand and a 40.1% rise in gold jewelry prices [3][18] - Characteristic 3: The increase in holiday days in May allowed for more substantial service demand release, positively impacting core service CPI, which rose by 0.2 percentage points to 0.5% [3][21] Group 2: Future Outlook - The combination of policy reinforcement and recovery in domestic demand is expected to alleviate inflationary pressures, although supply-side changes may still impose constraints on price readings [4][32] - The focus on boosting service consumption is likely to improve core service CPI further, while the ongoing "old-for-new" policy may provide significant support to core commodity CPI and PPI [4][70] Group 3: Regular Tracking - The overall CPI in May was -0.1%, slightly better than market expectations, with food supply showing a mixed performance. Fresh fruit and fish prices increased due to supply reductions, while seasonal vegetables saw a price drop [5][26] - Non-food CPI showed improvement in transportation and communication, while fuel prices for transportation saw a significant decline [50][71] - Service CPI in May reflected a recovery in demand, with core service CPI performing better than in previous years, indicating a positive trend in the service sector [58][71]