(Source: "Beijing News" 2025-01-17)
The Central Economic Work Conference held at the end of last year made comprehensively rectifying involutional competition and standardizing the behavior of local governments and enterprises one of the key tasks this year. Since the New Year, the National Development and Reform Commission, the State Administration for Market Regulation and other departments have made intensive statements on multiple occasions, emphasizing the comprehensive rectification of involution competition and actively resolving the periodic contradictions of oversupply in some industries. Combining solutions to industry competition disorder and "involution" issues with industry quality improvement and upgrading.
When the Beijing Municipal Government Work Report mentioned the overall work requirements and key tasks in 2025, it also clearly stated that involutional competition will be comprehensively rectified and off-site law enforcement will be standardized. Many deputies to the National People's Congress and members of the Chinese People's Political Consultative Conference have put forward relevant suggestions and proposals to prevent involutional competition.
Huang Yong, deputy to the Beijing Municipal People’s Congress, director of the Competition Law Center of the w88 casino, and director of the Economic Law Department of the w88 casino of Law
(Photo by Beijing News reporter Wang Fei)
Beijing should set an example for other places in comprehensively regulating involutional competition
Huang Yong, deputy to the Beijing Municipal People’s Congress, director of the Competition Law Center of the w88 casino, and director of the Economic Law Department of the Law w88 casinoIn an interview with a reporter, he said that "involution competition" is a vivid description of the fierce and vicious competition in various industries and links in our country. Recently, this phenomenon has spread to the production and circulation links of many industries, and systemic risks and hidden dangers in economic operations, international w88 and other fields have continued to accumulate.
“‘Involution’ will lead to a vicious cycle of low level, low efficiency, and low innovation in related fields for a long time, thus causing various risks.” Huang Yong gave an example, which is mainly manifested in the lack of coordination of competition policies in the formulation and implementation of industrial policies, leading to excessive competition. Under the model of "national industrial policy + local detailed supporting facilities", local policy industries have a high degree of homogeneity, and competition outweighs collaboration. As production and sales increase, prices and profits continue to fall, entering a shrinking cycle. Specifically, it has outstanding performance in industries such as new energy vehicles and photovoltaic panels. Especially after the photovoltaic panel industry has been losing profits for many years, hot social events such as "price alliances" for heating and bidding at prices lower than cost have also emerged. "Infighting" and "internal friction" have become serious.
In addition, there is insufficient coordination between "making the cake bigger" and "dividing the cake well", and high-growth companies fall into competition with existing stocks, causing chaos and breeding black and gray industries. At present, Internet companies have insufficient space to expand new businesses, and the homogeneity problem of "e-commerce monetization" is serious, which has led to "involution competition." The main manifestation is that some e-commerce platforms apply "refund only" clauses indiscriminately, which not only squeezes the survival space of merchants, but also encourages low-quality and low-price competition, damaging the healthy development of the industry; some e-commerce platforms launch an "automatic price follow-up" system to deprive merchants of their independent pricing rights, and merchants are trapped in the dilemma of "revenue-traffic"; black and gray industries take advantage of flaws in platform rules to gain nothing. Black and gray industries such as the "Wool Party", after purchasing goods from platform merchants, take the goods as their own through "refund only" and then resell them through second-hand trading platforms and other channels, causing the merchants to "lose their goods". Many colleges and universities and student groups have become the hardest hit areas of the "wool party". Colleges and universities in many places have been included in the "blacklist" by e-commerce platforms, which has seriously affected the normal sales and purchase of a large number of commodities, and has also had an impact on the good and moral order of society.
Huang Yongbelieves that the Central Economic Work Conference pointed out that “involution” competition should be comprehensively rectified and the behavior of local governments and enterprises should be regulated. As the best district in the city, Beijing should set a model for the whole country in comprehensively rectifying "involutionary" competition and continue to maintain a high-quality development trend.
He suggested establishing a research and judgment mechanism for comprehensive management of the types and causes of "involutionary competition" in the industry. It is necessary to distinguish between "policy-oriented" and "market-oriented" fields. For "policy-oriented" fields, it is necessary to focus on analyzing Beijing's location and resource advantages, implement policies according to local conditions, highlight the advantages of "small but beautiful", and avoid the disadvantages of "big and comprehensive"; for "market-oriented" fields, it is necessary to focus on analyzing the limitations of Beijing's market access and regulatory measures on enterprises to expand application scenarios, and release the innovation vitality of enterprises.
Implement the top-level design and institutional mechanism of “strengthening the basic position of competition policy” to avoid unreasonable and excessive government intervention in the market. Establish a decision-making coordination mechanism for competition policy and other policies. Clarify the coordination relationship and mechanism between competition policy and industry, finance, taxation, science and technology, employment and other policies. Give full play to the function of competition policy to "respect the market and give priority to competition", and formulate and correct various policies in accordance with the laws of long-term progressive innovation and development of the market. At the same time, the role of administrative monopoly law enforcement, fair competition review and other systems should be further brought into play, and the supervisory role of the People's Congress should be brought into play to prevent the government from promulgating policies and rules that may exclude or restrict market competition from the source.
In addition, comprehensive management of legislation, law enforcement, and justice will be improved to stabilize long-term market expectations. First of all, strengthen law enforcement against naked "red light running" behavior. In accordance with relevant laws, local laws and regulations, we must take resolute action against counterfeiting, forced automatic price-following agreements, black and gray industry "snatching" and other behaviors; at the same time, we must be wary of price alliances that are easy to breed in "involution" competition. Secondly, properly handle the relationship between law enforcement and justice. Problems that are unclear and uncertain in law enforcement are more often resolved through judicial channels. The essence of the problem is clarified through court debates and long-term rules are formed. Finally, the government must assume the main responsibility for corporate compliance. During the rule-making process, the government should consider how companies use the rules to ensure clear rule boundaries and clear standards, effectively reduce corporate compliance costs, and optimize the legal business environment.
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