Chinese President Xi Jinping has personally escalated the fight against the destructive price wars gutting Chinese industries, using the blunt new term “disorderly low-price competition” to signal a tougher regulatory stance.
This direct language, announced at a top economic meeting, replaces the vaguer term “involutionary competition” and points to a potential crackdown on firms that prioritize market share over quality and profits.
The problem is rampant across the economy. In the auto industry, a glut of investment fuels a brutal price war that analysts say could last for years. E-commerce giants are hemorrhaging money with subsidies to dominate new markets, while traditional sectors, such as steel, see manufacturers selling at a loss just to survive. Even education providers are slashing prices to attract cost-conscious customers, making it a race to the bottom.
Business owners blame a lack of innovation, which forces companies to compete solely on price. Beijing sees this cutthroat environment as a direct threat to the country’s entire industrial ecosystem, as it hinders upgrades, efficiency, and product quality.
The new rhetoric is ominously reminiscent of the 2020-21 crackdown on the tech sector’s “disorderly” expansion, suggesting the government is preparing to intervene more directly to restore market order and punish unfair practices.
