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China’s anti-involution campaign gains momentum

The authorities are addressing the excessive price competition that is leading to diminishing returns, while also seeking to manage capacity expansion

    • Companies in the electric vehicle sector have expanded aggressively, driving down prices and squeezing margins. Chinese capacity accounted for 105% of the global demand for EVs in 2024.
    • Companies in the electric vehicle sector have expanded aggressively, driving down prices and squeezing margins. Chinese capacity accounted for 105% of the global demand for EVs in 2024. PHOTO: REUTERS
    Published Tue, Aug 5, 2025 · 06:17 PM

    [SINGAPORE] “Nei juan” or involution, has become a hot topic in China, popping up frequently in social media and public debate. It was an issue that featured repeatedly in conversations with retailers, consumers, business tycoons, civil servants and students on my frequent trips to China.

    The term originally described a situation in the countryside, where farmers had been working harder, but their output had barely increased, resulting in per capita returns falling.

    Today, involution is used to describe a state of excessive competition that leads to diminishing returns, whether it’s in the workplace, classroom or marketplace. The phenomenon is not unique to China and is also found in varying degrees in Confucian-influenced societies such as Singapore, Hong Kong, South Korea, Japan and Taiwan.

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