The writer is a senior adjunct researcher at the Rand Corporation’s China Research Center and senior associate fellow at the Mercator Institute for China Studies
Spare a thought for Chinese Communist party cadres. In September 2023, at Xi Jinping’s behest, they plunged headlong into building “new quality productive forces”. Barely two years on, the supreme leader scolded them for overzealous investment in those emerging tech sectors and ordered an all-out campaign against “involution”. As if that is not confusing enough, the party’s upper echelon convened this week for its fourth plenum and issued a communiqué calling for acceleration towards manufacturing and technological self-reliance.
At least now Beijing admits to the existence of rampant industrial overcapacity and the many ills it spawns: underutilised capacity, brutal price wars, squeezed corporate margins and stubborn deflation. “Involution” is simply a buzzy internet shorthand for all these self-consuming pathologies. And the new anti-involution campaign is really a rerun of old struggles against the excess and imbalance bred by state-driven investment. As with past campaigns, any relief — for both Chinese companies and their foreign competitors — will be fleeting.