China’s market regulator has convened a meeting with leading solar, automotive and technology companies to address the vicious cycle of cutthroat competition that has been plaguing the sectors.
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The meeting – chaired by Meng Yang, a vice-minister from the State Administration for Market Regulation – brought together representatives from seven major firms: solar companies Trina Solar, JA Solar Technology and Longi Green Energy Technology; tech giants Alibaba Group and JD.com; and car makers BAIC Group and Mercedes-Benz.
The companies shared their concerns with officials about unsustainable levels of competition in their fields, and provided suggestions on “antitrust measures, fair competition reviews and compliance guidance”, the market regulator said on its official website on Wednesday.
Chinese authorities have become increasingly concerned in recent months by neijuan – or “involution – a term that refers to a cycle of cutthroat competition in which companies are forced to invest ever greater resources but do not generate proportional returns in terms of profits or new technologies.
Fundamentally resulting from industrial overcapacity, neijuan has become a major drag on several industries in China, particularly electric vehicles and solar energy.
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In July, the Politburo of the Communist Party mentioned neijuan – the first time a central government conference readout had referenced the term – with the body vowing to “prevent vicious involutionary competition”.
A few months later, during the agenda-setting central economic work conference, China’s top leaders took a stronger tone by calling on authorities to “comprehensively rectify involutionary competition”.