"We should deepen the reform of market-oriented allocation of factors and take the initiative to eliminate local protection, market segmentation and" involution "competition.
On the basis of accurately understanding the stage problems and deeply grasping the market rules, the Party Central Committee, with Comrade Xi Jinping as its core, has deployed a comprehensive rectification of the "involution" competition. This is an decisive measure to solve the current contradictions in economic development, an important guarantee to deepen the reform of the economic system, and an effective way to promote enterprises to achieve innovative development, climb to the middle and high end of the value chain, and constantly enhance the resilience of development.
(1)
Eliminating "involution" competition is an inevitable requirement for doing things in accordance with economic laws.
Competition, the basic feature of market economy, is also the soul of market economy. However, competition can be divided into benign competition and unfair competition, and the "involution" vicious competition violates the economic law, and its drawbacks are obvious.
First, it will weaken the overall competitiveness of the industry.
In recent years, China's new energy automobile industry has developed rapidly, ranking first in the world in production and sales for 10 consecutive years, making positive contributions to global carbon neutrality. There are hidden worries behind the
achievements. In 2024, the profit margin of automobile enterprises dropped to 4.
Facts have proved that enterprises pay too much attention to playing the "price card". Although they can attract some price-sensitive customers and increase sales in the short term, they will squeeze the profit margin, thus restricting the accumulation of technology, innovative research and development, and after-sales investment, thus affecting the competitiveness of the whole industry.
Second, it will destroy the ecology of industrial development.
In order to reduce prices and costs, some enterprises choose to take advantage of their dominant position to "force down prices" upstream and downstream, extend the account period and transfer pressure. Data show that in 2024, the profit margin of China's spare parts and accessories industry decreased by 0.3 percentage points compared with the same period last year, and the liabilities increased by 10% compared with the same period last year.
In order to reduce prices and costs, some enterprises cut corners, reduce quality and allocation, follow the trend of imitation, copy patents, malicious smear and false publicity. Bad money drives out good money, and industrial ecology needs to be optimized urgently.
Third, it will hinder the domestic cycle.
From the perspective of supply, high-quality development is manifested in innovation, demand capture, brand influence, strong core competitiveness, and high quality of products and services.
From the perspective of distribution, high-quality development should achieve "return on investment, profit for enterprises, income for employees and tax revenue for the government".
"Involution" competition has distinct internal friction, excessive resources and factors input inefficient competition, inhibits the release of innovation vitality, hinders the formation of high-level dynamic balance between supply and demand, and directly affects the wage level of employees, government tax revenue, future investment confidence, thereby affecting the overall economic development.
In recent years, China's "new three" products represented by new energy vehicles, lithium batteries and photovoltaic products have developed vigorously, and high-quality green production capacity has reduced the cost of global green transformation, contributing an important force to the construction of a diversified pattern of global energy supply. However, we should also see that the "involution" competition with high input and low output is not beneficial to the healthy development of the industry, nor is it the original meaning of high-quality development.
(2)
Eliminating "involution" competition is an inevitable requirement for building a high-level socialist market economic system. Where does
"involution" come from?
On the one hand , the annual production capacity of all sectors of the industry exceeds 1100 gigawatts, and there is a periodic oversupply. Enterprises cry out that product prices, like "sitting on a slide", have fallen sharply from polysilicon, silicon wafers, batteries to components.
On the other hand, some local governments are still keen on attracting investment, launching projects, giving land, policies and funds. According to incomplete statistics, only in 2024, the investment will exceed 800 billion yuan. Behind
the "involution", there is a periodic mismatch between supply and demand. The uncertainty of the external environment increases, the domestic effective demand is insufficient, and the contradiction between supply and demand is highlighted, which intensifies the competition in the industry and promotes the "involution" to a certain extent.It has the influence of
a high-standard market system that needs to be improved. Local protectionism still exists to a certain extent, resulting in market segmentation; the exit mechanism of business entities is not perfect, which aggravates the distortion of competition; product quality supervision is not in place, leaving room for low-quality and low-price competition.
Some places are affected by the dislocation of view of political achievement. Some localities are blindly chasing the wind, setting up stalls and launching projects, resulting in redundant construction and increased production capacity; some localities are engaging in "subsidy competition" and creating "policy depressions", which restrict the effective play of the role of the market and lead to misallocation of resources; some localities are improperly intervening in enterprises in difficulty, making it difficult for inefficient production capacity and backward production capacity to withdraw, and intensifying vicious competition.
To eliminate the "involution" competition, the key is to coordinate the relationship between the government and the effective market. The Decision of the Third Plenary Session of the Twentieth Central Committee of the
Communist Party of China puts the construction of a high-level socialist market economic system in a prominent position, emphasizing "giving full play to the decisive role of the market in the allocation of resources and better playing the role of the government".
At the beginning of this year, the Guidelines for the Construction of a Unified National Market (Trial Implementation) were officially issued, which clearly put forward the idea of "preventing the introduction or implementation of policies and measures that hinder fair competition".
According to this guideline, Guangdong will speed up the construction of a pilot area for fair competition in a unified Guangdong-Hong Kong-Macao Greater Bay Area market, and Zhejiang will continue to deepen the pilot reform of provincial fair competition. With the deepening of the construction of a unified market, the regional "small cycle" has been gradually broken, market barriers have been gradually dismantled, and inter-regional trade has become smoother, laying a solid foundation for releasing the potential of domestic demand and breaking the "involution".
On April 20, the Measures for the Implementation of the Regulations on Fair Competition Review were formally implemented. This method, focusing on curbing the vicious competition in attracting investment in some areas, requires that when giving preferential policies, we should adhere to legal compliance and treat them equally.
From the issuance of "Opinions on Improving Market Access System", to thoroughly break down market access barriers, to strengthen the rigid constraints of fair competition review of laws, regulations, policies and measures, to improve the benchmark system of administrative penalty discretion.. The continuous improvement of the basic system will help to form a fairer and more dynamic market environment.
Aiming at the "list of problems", the reform is making great efforts. The more standardized the government's behavior is, the more effective the market is. To comprehensively rectify the "involution" competition, we must create a fairer and more dynamic market environment to optimize the efficiency of resource allocation and maximize the benefits.
(3)
Eliminating "involution" competition is an inevitable requirement for strengthening the domestic circulation and building a unified national market. The Regulation
on Guaranteeing the Payment of Small and Medium-sized Enterprises was formally implemented on June 1, and 17 automobile enterprises announced that they would unify the payment period of suppliers to 60 days. Under the initiative of China Association of Automobile Manufacturers, many automobile enterprises said that they would jointly protect the healthy and orderly industrial ecology..
At present, related industries are actively taking action to say no to "involution" competition. Relevant departments have a clear attitude and intensify the efforts of "involution" competition to promote high-quality development.
Continue to expand demand and make the cake bigger.
"3C product subsidy 15%", "household appliances kitchen and sanitary subsidy 20%".. Walking into supermarkets all over the country, all kinds of signs of replacing old ones with new ones are noticeable. Data from the Ministry of Commerce show that as of May 31, the total sales of five categories of consumer goods will be driven by the replacement of old ones with new ones in 2025. 1.
With the "two new" policy as the starting point, China is expanding domestic demand in all directions. A super-large domestic market with a population of more than 1.4 billion is gradually releasing its potential.
Strengthen rectification according to law and strike hard. We
will strengthen spot checks on product consistency, carry out law enforcement against unfair competition, crack down on market disorders such as low quality and low price, and resolutely crack down on infringement, counterfeiting, counterfeiting and selling.
Market economy is an economy ruled by law. In view of unfair competition, strengthening governance and implementing precise policies in accordance with the law and regulations will effectively correct market failure. The business environment is good, the operation mechanism is smooth, and the elements flow freely, which is conducive to the survival of the fittest and the elimination of the "involution".
Strengthen standard guidance and help upgrade.
According to the official website of the Ministry of Industry and Information Technology, in May alone, four mandatory national standards, seven recommended national standards, and 79 industry standards were under consultation. On the National Standards Information Public Service Platform, we can see that nine industries issued 421 industry standards in May.
Transformation and upgrading is an effective means to crack involution. Taking standards as the guide is conducive to promoting the industry to abandon simple price competition and pursue value competition with more "technical content", thus resolving the inefficiency problems caused by "involution" competition and realizing "quantity increase and quality increase".
Government departments should work in a multi-pronged manner and all parties concerned should work together to promote it.
Trade associations take active action . As an economic promotion organization, industry associations are the key third party to communicate with the government, market, enterprises and society. China Photovoltaic Industry Association guides enterprises to sign voluntary production control and self-discipline conventions, China Wind Energy Commission organizes the formulation of criteria and penalties for low-price vicious competition, and China Cement Association explores the construction price coordination mechanism. More and more trade associations have come forward to give full play to the self-discipline mechanism of the industry, standardize enterprise behavior, maintain market order, and promote the healthy and sustainable development of the industry.
The majority of enterprises are self-disciplined. Central enterprises take the lead in revising the bidding rules of energy storage industry, reducing the weight of price and improving the weight of technical evaluation; in the face of the imbalance between supply and demand in the market, the top ten domestic photovoltaic glass manufacturers have decided to collectively reduce production by 30%; as the main chain enterprise, Ningde Times promotes the technological innovation of upstream and downstream enterprises and the value enhancement of the whole industrial chain through open innovation. To break the "involution" competition, enterprises can also become the breaker. With the guidance of
the government, the self-discipline of the industry and the action of the enterprises, the comprehensive rectification of the "involution" competition can be steadily promoted and effective.
China's economy is a sea, and every enterprise is a tide-maker fighting against the storm. With the system to guide healthy competition, with innovation to open up incremental space, in the whole society to form a "high quality and high price" value consensus, China's economic giant ship will sail to the sea of stars of high-quality development.
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