Bigger reformer-baked cake can prevent 'involution'

The central authorities recently urged governments of various levels to take necessary measures to prompt industries to strengthen self-discipline and prevent vicious "involutionary" competition.

"Involutionary" competition refers to the fierce competition among companies for limited resources. This competition forces all parties to make more efforts, but may ultimately lead to increased overall pressure and reduced efficiency. Such competition does not result in growth in productivity or a more advanced economic model. Without significant breakthroughs, society spirals into a state of internal friction, with increased complexity but not expansion.

The authorities need to provide an institutional solution.