- cross-posted to:
- sino@hexbear.net
- cross-posted to:
- sino@hexbear.net
“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
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I noticed this was a problem in the US like decades ago. Nice to see China addressing the issue while the US will foreseeably plunge further into madness. The world has enough low quality products designed to be nearly single-use (often behind the consumer’s back). The entire economy of the world needs to have its mind raised out of the gutter. I hope this is far more successful and prosperous than expected.
What once required a bachelor’s now needs a master’s; everyone studies harder but no one is better off.
This is also true in the West.
Yup! For example, a lot of programming jobs that demand university degrees absolutely don’t need them. A side effect of this has been that universities have been focusing on churning out developers for the industry instead of focusing on actual research. The point of a university should be to focus on the science, and programs shouldn’t be driven by the industry needs.
The CS departments in universities have become cattle farms.
Absolutely
I’ve recently been searching for (paid) internships for when I graduate, and something i heard from a couple people is while people in my degree (civ engineering) get paid a decent amount for their internships (I think I saw between $18-33 an hour depending on company), computer scientist majors got basically entirely unpaid. Of course they have more opportunities since basically every business needs a programmer nowadays, but it doesn’t really matter if you’re not making money at the same time. But I’m guessing they don’t need to incentivise CS majors since theres just an absolute crap ton of them
Of course this is anecdotal and not at a top uni so dont take this as a given everywhere
I studied computer science and graduated 2 years ago from a good (not great) school. Back then unpaid internships were unheard of in cs. It’s crazy how much the job market has shifted for cs in just a few years
It’s true everywhere, I would eat my non existent hat if my government did a single thing to deal with real issue like this instead of just cutting funding to public colleges and letting the "free market’ solve it.
Based pfp, comrade. Indian?
It’s particularly interesting that with the guildance of marxism-leninism and objective class analysis you have a much healthier and more informed attempt at changing or diagnosing the issues in your society instead of fundamentalist Christian nonsense.
Indeed, scientific analysis rooted in material conditions will necessarily produce better results than dogmatism born out of superstition.
That sounds an awful lot like he’s gonna
But at what cost?
The Chinese economy is now days from collapse.
Value comes from work. As long as there are workers willing to work, a society won’t collapse
Yes, but have you considered my bad vibes?
The Great Chinese Vibe Collapse Of 2026 incoming
You heard it here first
https://hexbear.net/comment/6505016
This dude Arnaud Bertrand is always hyping up everything and anything. I guess if you get a XHS take, who hypes nothing ever, you can triangulate how important that stuff is. Its basicaly some general fiscal and market economy signals going into the the next 5YP.
Firstly that some sectors should reign in price wars and consolidate (EVs in particular), and signals the CPC may be ready to pull the plug of this development phase in EVs and some other high tech sectors and eliminate smaller players while keeping the winners and more predictable market practices.
“promote ‘orderly exit’ of outdated capacities”,“improve fiscal systems, statistical frameworks, and credit mechanisms to promote market unity” “rein in ‘chaos’ in local practices of attracting investments”
I guess these are some about local government dept, financial mechanisms, liquidity and swaps. Its signals from the party that some “centrally supervised capital discipline” project is in order and will continue. More importantly liquidating local government financing vehicles (LGFVs) -and the dept accumulated allong the way that everyone has been fearmongering about- that basically acted as a shroud to veil the very undisciplined financial behaviors of local govts. According to this recent gov paper reviewing the last 5 year plan
“By the end of June 2025, over 60% of financing platforms had exited, meaning that over 60% of these platforms’ hidden debts had been eliminated” . Most likely a mix of land collateral asset holding firms and real estate firms getting unwound. The CPC in general seems less concerned about a systemic danger from local dept situation than it was a couple of years ago. Restructuring and cleaning up of local finance has been quitely going on, with some pain of course, and will continue
Also this
from the HB news mega
Damn not sure what to think about this. The race to the bottom competition is what makes chinese companies a global boom to the worldwide population, having access to commodities with prices near their production cost is good for the people (even after having to deal with all the middlemen costs involved in international trade), this destructive competition in China makes it awesome to my eyes.
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.
The competition in the USSR sounds interesting. Do you have any further information on that?
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.
How would this bode for chinas future as americas rival?
People die from being too overworked and chronically stressed out. That’s why it’s unhealthy for kids to be academically competing with each other since their early days. It’s definitely an issue that needed to be addressed.
That’s to say, I’m extremely interested in knowing where this is going.
