Local govts must rein in 'involutionary' competition

The Central Economic Work Conference, which concluded last week, stressed the urgency of addressing "involutionary" competition.

The dog-eat-dog competition is mainly manifested in fierce homogeneous competition among enterprises. In the case of excessive consumption of resources without improving productivity, the competition leads to price competition, which continuously transmits cost pressure and profit loss to enterprises. If unchecked, the enterprises will have no energy to open new markets, seek innovation or enhance efficiency.

Such competition is emerging in the new energy vehicle, lithium battery and photovoltaic industries in particular. The lack of international competition has prompted enterprises to try and seize market share through price competition and then reduce costs through large-scale production.