The phenomenon has been at the forefront of public debate in China – even being addressed by top policymakers.
For the first time in its highly-anticipated work report released on Wednesday (Mar 5) during the opening of the National People’s Congress (NPC) in Beijing, Chinese Premier Li Qiang addressed the issue of “neijuan-style competition”.
“We will move faster to develop and improve foundational institutions and rules for this purpose,” Li said.
“We will eliminate local protectionism and market segmentation, remove bottlenecks and obstacles such as those impeding economic flows in terms of market access and exit as well as allocation of production factors and take comprehensive steps to address rat race competition.”
His words follow previous pledges, including one at the Central Economic Work Conference (CEWC) in Beijing last December, where officials called for industry self-discipline and sustainable market practices to combat industrial overcapacity and vicious competition.
“The fact that this term appears in the government work report clearly indicates the government’s strong concern over this negative phenomenon,” Dr Chen Bo, a senior research fellow at the National University of Singapore’s East Asian Institute, told CNA.
“Through such high-level government documents and the policy-making process, it is hoped that effective measures will be introduced.”
Liu Zhibiao, a professor and director of the Yangtze Industrial Economic Think Tank at Nanjing University, on the other hand, downplayed the significance of neijuan being mentioned for the first time in a government work report.
“It is simply about implementing the spirit of the Central Economic Work Conference,” he said.
On Feb 25, China’s top industry regulator, the State Administration for Market Regulation (SAMR) chaired a fair competition symposium with top executives from conglomerates like the Alibaba Group, JD.com and Mercedes-Benz China. The session focused on addressing involution and gathering industry feedback on market challenges as well as potential solutions.
Local governments have also outlined plans to combat neijuan.
Officials in the eastern coastal Jiangsu province proposed tackling involution in key industries through coordinated industrial planning, while Hunan prioritised regulating competition in investment attraction.
https://www.channelnewsasia.com/east-asia/china-two-sessions-involution-neijuan-4978661
