Beijing plans to strengthen intellectual property protection and tighten oversight of price wars that authorities say are undermining innovation and the economy’s long-term competitiveness.
Tao Kaiyuan, Vice President of China’s Supreme People’s Court, said courts, regulators and lawmakers should coordinate more closely to tackle what Beijing describes as “involution-style” competition — a term widely used in China to refer to destructive price wars and excessive capacity expansion.
In an article published on the judiciary’s website, Tao said monopolistic conduct, weak innovation incentives and unfair competition were creating a vicious cycle of “low-price, low-quality and low-innovation” rivalry. According to her, such a model is already eroding the long-term vitality of several industries.
Chinese authorities are expected to place particular emphasis on intellectual property protection. The Supreme People’s Court argued that weak IP protection had contributed to a “race to the bottom” in sectors including electric vehicles, solar panels and advanced manufacturing. The article noted that original research requires years of investment and development, while imitation and infringement can be carried out far more quickly and cheaply.
Tao also criticized the rise of “low-quality” patent filings and sprawling “patent thickets,” in which companies accumulate patents not necessarily to advance technology, but to block rivals or extract excessive licensing fees.
To address the issue, authorities are proposing stricter judicial review of patents and higher thresholds for recognizing genuine innovation. According to the Supreme People’s Court, since 2021 Chinese courts have awarded punitive damages in 58 IP-related cases, with total compensation exceeding 2 billion yuan ($277 million).
In addition, Chinese authorities plan to strengthen enforcement against predatory pricing, monopolistic agreements and new forms of unfair competition involving algorithms, data and digital platforms. Beijing is also considering amendments to the Price Law aimed at curbing below-cost competition and price discrimination in the digital economy.
Source: MLex
