Opinion: The End of ‘Growth at All Costs’
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China’s top economic leadership has launched a coordinated campaign to stamp out the “involutionary” competition roiling its industries, signaling a new and more forceful phase in Beijing's efforts to steer the economy away from ruinous price wars and toward higher-quality growth.
At a key meeting of the Central Financial and Economic Affairs Commission on July 1, leaders stressed the need to address low-price, disorderly competition and guide outdated industrial capacity toward an orderly exit, according to state media. The high-level directive follows a July 2024 Politburo meeting that first officially identified the need to prevent “involutionary, vicious competition,” elevating a popular social lament into a top-tier policy concern.
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- China’s leadership is launching a coordinated campaign to curb destructive “involutionary” competition and promote higher-quality economic growth.
- The crackdown targets price wars and overcapacity, leading to profit margin declines, as seen in the auto sector where margins dropped to 3.9% in early 2025.
- Beijing aims to restore market order, reduce harmful subsidies, and shift toward a modern services-driven economy while clarifying government and market roles.
- China Association of Automobile Manufacturers
- The China Association of Automobile Manufacturers (CAAM) is an industry body that has highlighted the negative impact of "disorderly price wars" on the auto industry's profitability. CAAM reported a significant drop in the sector's average profit margin, attributing it to these price wars. They argue that such aggressive tactics hinder innovation and overseas expansion within the industry.
- 2024：
- Auto industry’s average profit margin fell to 4.3%.
- July 2024：
- Politburo meeting officially identified the need to prevent 'involutionary, vicious competition,' raising it to a top-tier policy concern.
- First quarter of 2025：
- Auto industry’s average profit margin slid further to 3.9%.
- May 2025：
- Head of the State Administration for Market Regulation published an article describing the anti-involution effort as a 'systematic project.'
- Late May 2025：
- China Association of Automobile Manufacturers issued an initiative blaming 'disorderly price wars' for the auto industry's declining health.
- Before Early July 2025：
- 33 construction firms jointly issued an 'anti-involution' pledge, vowing to pursue long-term value over blind expansion and excessive debt.
- Early July 2025：
- Ministry of Industry and Information Technology informed manufacturing executives it would curb disorderly competition in the solar industry.
- CX Weekly Magazine
Jul. 18, 2025, Issue 27
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