习近平：纵深推进全国统一大市场建设__中国政府网
www.gov.cn
建设全国统一大市场，不仅是构建新发展格局、推动高质量发展的需要，而且是赢得国际竞争主动权的需要。我国作为全球第二大消费市场，必须把全国统一大市场建设好，增强我们从容应对风险挑战的底气。

“Rectifying disorderly low-price competition among enterprises” is probably the most important one. It sounds like something of the order of “houses are for living, not for speculation”, the expression Xi used to announce the deflation of the real estate bubble.

Xi is saying he wants an end to “involution” (“内卷”, Neijuan), a term he mentions several times in his text, and which is very trendy in China right now. Probably the best translation for it is not actually “involution” but more something akin to “rat race”, “race to the bottom” or “destructive, zero-sum competition”. It doesn’t only relate to businesses, but also to social issues in China like the extreme competition for education, the 996 culture, the feeling of running faster and faster just to stay in the same place.

It’s true that when you look at the current extreme competition in business, it makes everyone worse off: for instance China leads the world in solar because of this competition but when you look at it individual companies’ margins are razor thin, making this quite the pyrrhic victory for individual Chinese companies.

Same thing for education for instance, where you need ever-higher degrees for the same jobs. What once required a bachelor’s now needs a master’s; everyone studies harder but no one is better off.

To call changing all this “major” is even an understatement given how deeply embedded these competitive dynamics are in all layers of Chinese society and economy. This isn’t just tweaking policy at the margins: this is a bit like trying to transform a Formula 1 race into a marathon while the cars are still on the track. He’s right that this is more and more of a problem in Chinese society but at the same time much of China’s current architecture is built around this hypercompetitive model.

What Xi promotes instead is “high-quality development” which, when it comes to business, means innovation and differentiation rather than price wars, sustainable margins and market consolidation.

He doesn’t touch much in his article about the social changes this implies but we got a preview about what that could mean a couple of years ago when China banned the tutoring industry - an attempt to break the education arms race where parents were outcompeting each others to give their kids every possible edge, which wasn’t good for the kids and the families’ wallets. A typical example of “Neijuan.”

Let’s see how this all materializes but the one thing is sure: the level of ambition here is staggering, even by Chinese standards.

https://xcancel.com/RnaudBertrand/status/1967520398112878698

  • ☆ Yσɠƚԋσʂ ☆@lemmygrad.mlOP
    40·
    14 days ago

    It should be possible to have competition without the burnout. There shouldn’t be a human cost associated with producing things cheaply and efficiently. It’s also worth noting that competition doesn’t necessarily need to be zero sum style competition. For example, USSR had different design bureaus and they would compete with each other, and submit different proposals that got evaluated. However, at the end of it all everybody would share what was learned in the process creating a positive sum scenario. This approach avoids duplication of effort where different companies keep reinventing the wheel instead of sharing their findings.

      • ☆ Yσɠƚԋσʂ ☆@lemmygrad.mlOP
        13·
        14 days ago

        The competition between the MiG and Sukhoi fighter design offices, for example, was quite significant. They designed pretty good aircraft for far less money than the Western aircraft companies. In the same way, the OKB-1, OKB-52 and OKB-586 design offices competed fiercely, with different ideas of how the space and missile programmes should be organised. At the end of the day though, all these design bureaus were owned by the state and the innovations they came up with weren’t intellectual property of a particular company the way it works with competition under capitalism.