China takes aim at ‘race-to-the-bottom’ competition

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cut-throat competition that has seen companies race one another to the bottom – and out of business. The phenomenon is termed neijuan, or involution, which broadly refers to excessive competition in a saturated space that results in diminishing returns, and even stagnation. This dynamic, also used colloquially to describe a feeling of burnout....

led companies to slash prices in a downward spiral – to the point of making losses – in a bid to secure a share of the market.

competition between companies narrowly focused on price will affect China’s pursuit of an innovation-driven economy...This is as companies will have few resources left for research and development. “Everyone is bleeding, gross profits are extremely low, what resources will you use to innovate?”

Qn: Is competition always desirable? (Cam. 2016)