China’s top regulator of the manufacturing sector has vowed to phase out outdated capacity amid Beijing’s efforts to combat excessive competition, while promoting hi-tech consumer goods as part of a broader push to revive domestic demand.
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The Ministry of Industry and Information Technology (MIIT) said at a meeting of senior officials on Monday that it would “consolidate the results of a sweeping crackdown on ‘neijuan’ competition in the electric vehicle sector and tighten oversight of key industries such as solar power”.
“[We will] use upgraded standards to force out outdated production capacity,” the ministry said in a readout on its official website, adding that it would strengthen the mandatory national standards in the industrial and information technology sectors.
The term neijuan, or “involution” – a buzzword in Beijing’s recent policy discourse – refers to excessive, cutthroat competition that has plagued several industries, eroding corporate profits and exacerbating persistent deflationary pressures.
Meanwhile, China’s State Administration for Market Regulation also pledged during a two-day meeting from Sunday to Monday that it would “regulate enterprises’ low-quality, cut-price competition in accordance with laws and regulations”.
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In line with efforts to better allocate market resources and phase out outdated production capacity, Beijing has been stepping up its push for mergers and acquisitions (M&As). A recent example was the approval for China State Shipbuilding Corporation to absorb China Shipbuilding Industry Company – a move aimed at streamlining operations and accelerating industry development.