China's Market Regulator Vows to Combat 'Involution' Competition
Luo Wen, Party Secretary and Director of China's State Administration for Market Regulation (SAMR), has written an article for the People's Daily emphasizing the ongoing efforts to address "involution" competition. He stated that while progress has been made in improving the competitive landscape across key industries, the issue remains prominent in certain sectors. New forms and hidden practices of "involution" are emerging, posing risks of a new round of instability. Luo described the campaign against such competition as both a critical battle and a protracted struggle. He stressed that market regulators must diligently implement the decisions of the Party Central Committee and the State Council. This involves adhering to legal governance, utilizing legal tools effectively, and employing a comprehensive set of regulatory measures. The ultimate goal is to purify the market competition environment and accelerate the formation of a market order characterized by high quality, fair pricing, and healthy competition.
The SAMR's focus on "involution" competition highlights a state effort to reassert control over market dynamics, moving away from potentially destabilizing, zero-sum competitive practices. This initiative reflects a broader trend of centralized governance seeking to ensure predictable economic outcomes and prevent systemic risks. The emphasis on legal tools and regulatory "combinations" suggests a strategy to formalize and standardize market behavior, potentially at the expense of disruptive innovation or agile market responses. Over the next decade, the success of this approach will depend on balancing the need for order with the imperative for economic dynamism in an increasingly complex global landscape. The challenge lies in fostering genuine quality and value without stifling the entrepreneurial spirit essential for long-term growth.
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