For the "involution" vicious competition, the central level began to "take action" to rectify.
The the Political Bureau of the Communist Party of China (CPC) Central Committee meeting held on July 30th proposed that "self-discipline in the industry should be strengthened to prevent’ involution’ vicious competition", which aroused widespread concern and reflection. This is not only a keen judgment on the problems existing in the current economic development and market operation, but also a clear guide to the future direction.
The word "involution" is familiar to everyone, from micro-feelings, too much work and raising a baby, to the smoke in some industries, the price and sales volume of coils, and the vicious competition of "involution" makes people anxious and painful.
In the past few years, the vicious involution of some industries has been full of "gunpowder smell". For example, in the new energy automobile industry, not only the price, weekly list and marketing, but also the "out-of-circle remarks" have repeatedly stood on the cusp of public opinion. This kind of roll does not bring technological innovation, product upgrading and service upgrading, but mutual harm of "killing one thousand enemies and losing eight hundred", and even some enterprises cut corners, make fakes and sell fakes for the sake of roll. What is worrying is that not only in the new energy automobile industry, but also in many industries such as photovoltaics and e-commerce.
The vicious competition of "involution" is, in the final analysis, a low-quality paper and a stumbling block to development. In order to compete for resources among peers, all parties have to redouble their efforts and compete excessively in unimportant aspects, links and details. This kind of volume seems to be very hard, but it may eventually lead to increased overall pressure and reduced efficiency. This kind of volume, in essence, is not the right way, but the wrong way; In the long run, it is not a way out, but a dead end.
The breeding ground for the "involution" vicious competition lies in the serious homogenization of products, low added value, limited cakes, and the innovation required for high-dimensional competition takes time. Many enterprises can’t sit still and can’t stand their temper, so they play the price card. Of course, we can’t ignore the enterprise volume, and some local governments are also involved. For the sake of GDP, some local governments attract investment by vicious competition, such as illegal tax cuts, financial awards and subsidies, and lowering land prices. To a certain extent, they have supported industry expansion and competitive price reduction in disguise, and promoted "adding volumes".
To prevent "involution" vicious competition is not to avoid market competition. What we advocate is a volume that dares to innovate, compete for technology and improve quality; What we oppose is the kind of volume that destroys the market order and hurts the development of the industry. An enterprise’s steady progress, innovation and pursuit of quality are not vicious, but a kind of self-renewal and self-iteration, which is the power engine needed for the benign development of the market.
To prevent "involution" vicious competition, besides strengthening industry self-discipline, it is necessary to support scientific and technological innovation and build a fair market environment. On the one hand, we will promote industrial upgrading, expand emerging industries and future industries, constantly make bigger and stronger cakes, cultivate a large number of gazelle enterprises and unicorn enterprises, and fundamentally solve the problem of involution. On the other hand, avoiding vicious involution of enterprises and industries is inseparable from a fair competitive market environment. The Regulations on the Review of Fair Competition, which came into effect on August 1st this year, has made clear provisions on ensuring all kinds of business entities to use production factors equally according to law and participate in market competition fairly. All parties work together to build a good market ecology, so that all walks of life can thrive in healthy and fertile soil.