The term refers to destructive, excessive competition with little progress, gained prominence after President Xi Jinping vowed to regulate chaotic price wars\u2014especially in sectors like solar, EVs, and steel.<\/p>\n
Bloomberg (gated) carry the report:<\/p>\n
Markets are responding positively. Mainland Chinese stocks (CSI 300) have outperformed in JulyMorgan Stanley now prefers A-shares over Hong Kong listingsSolar and steel companies have seen strong gains, amid hopes for coordinated reforms to reduce overcapacity and improve profitability.<\/p>\n
However, this time reform is harder. Overcapacity now spans competitive private-sector industries, unlike the 2015\u20132018 reforms focused on state-run coal and steel. Fierce price wars in tech (e.g., Alibaba, JD.com) highlight the challenge.<\/p>\n
Addressing these imbalances may also require boosting consumer demand\u2014something Beijing has struggled with. Still, analysts see the government\u2019s new tone as a clear, if early, step toward policy action.<\/p>\n
Later this year,
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