China's 'Anti-Involution' Campaign Addresses Excessive Competition

Chinese authorities have launched an 'anti-involution' campaign to combat excessive price competition among domestic manufacturers that officials believe is damaging the national economy. The term 'involution' or 'neijuan' in Chinese describes a self-defeating cycle of hypercompetition that leads to diminishing returns despite increasing effort, a concept that has gained popularity in China since 2020. This campaign aims to address overcapacity issues resulting from previous government stimulus efforts that have led to price wars across multiple sectors.