China communist party calls for price war crackdown

AWANI

: A key Chinese Communist Party journal, Qiushi, has called for a crackdown on destructive price wars and unfair competition by major firms and local governments, warning that such practices waste resources, fuel unsustainable debt, and threaten long-term economic growth.

Transcript

00:00A prominent Chinese Communist Party publication has called for a crackdown on competition that sparks price wars and squeezes profits,

00:08criticising major firms and local governments for unfair practices.

00:13The party's Chushieh article warns that price wars waste resources and drive unsustainable debt, threatening long-term growth.

00:22This comes amid rising deflationary fears in China and US President Donald Trump's tariffs,

00:28which jeopardise the global demand vital to China's growth targets.

00:33In the recent weeks, China has intensified criticism of price wars,

00:38with top leaders vowing to increase regulation against aggressive price cutting.

00:42In a Chushieh article focused on involutionary competition,

00:47where firms and local governments invest heavily to gain market share despite weak demand and stalling revenue growth.

00:54It highlighted sectors like photovoltaics, lithium batteries, electric vehicles and e-commerce platforms.

01:02Last month, solar producers urged an end to price wars,

01:06while Eastern Chinese car dealers recently warned that automakers are pushing below cost sales,

01:11raising inventory and cash flow risk.

01:13The Chushieh article also highlighted problematic corporate behaviour such as compromising on product quality to cut costs,

01:21thus weakening innovation and reduces research and development investments that harms overall consumer interest.

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