- China is increasingly concerned about "involutionary" (neijuan) competition
- SAMR Approves ANA Holdings' Takeover of Nippon Cargo with Conditions
- САС Releases Updated Guideline on the Application for Security Assessment of Cross-border Data Transfers
- TikTok Lays off Employees in its US E-Commerce Division
- France Fines Fast-Fashion Giant Shein €40 Million
- China's Geely Launches in UK
China Is Increasingly Concerned about "Involutionary" (Neijuan) Competition
The main journal of the Communist Party of China, Qiushi, published an article on "involutionary" competition.
The article, entitled “Deeply Understand and Comprehensively Rectify "Involutionary" Competition,” notes that from the perspective of enterprise behavior, "involutionary" competition mainly manifests as: 1) low-price competition — in some industries, enterprise products are highly similar in functions, quality, and after-sales service. Enterprises mainly rely on price wars to gain market share and sell at ultra-low prices or even below cost prices; 2) homogeneous competition — some enterprises ignore consideration of industry patterns and their own capabilities, blindly pursuing so-called hot trends and expanding production accordingly, leading to serious redundant construction within industries and lack of differentiated competitive advantages; 3) promotional marketing "race to the bottom" — some enterprises invest large amounts of resources in advertising and channel promotion, while product quality and service do not improve correspondingly, causing market competition to fall into a vicious cycle that emphasizes promotion over quality. From the perspective of local government behavior, "involutionary" competition mainly manifests as: 1) artificially creating policy havens to attract enterprises and cultivate industries, irregularly implementing unfair and non-universal preferential policies regarding taxes, fees, subsidies, and land use, leading to disorderly competition; 2) disregarding local industrial foundations and resource endowments, blindly launching emerging industries and key industries, causing massive redundant construction and overproduction within industries; 3) setting explicit or implicit market barriers to protect local markets and support local enterprises, treating various enterprises differently and disrupting fair competition order.
According to the article, competition is an important mechanism for market economy operation. Through competition, resource allocation is optimized and survival of the fittest is achieved, forcing enterprises to continuously innovate technology and improve business management, thereby improving economic operational efficiency and promoting economic development and technological progress.
However, once competition evolves into disorderly "involution," it will distort market mechanisms, destroy market fairness, and cause many negative impacts.
Rectifying "involutionary" competition is a complex systematic engineering project that cannot be accomplished overnight. It requires using multiple approaches simultaneously and comprehensive rectification.
The issue of disorderly price competition was also raised at the recent 6th meeting of the Central Commission for Financial and Economic Affairs. During the speech, Chinese President Xi Jinping stated that one of the key points of building of a unified national market is “to regulate enterprises' disorderly price competition in accordance with laws and regulations.”
SAMR Approves ANA Holdings' Takeover of Nippon Cargo with Conditions
SAMR has approved ANA Holdings' acquisition of Nippon Cargo Airlines (NCA) with conditions.
The deal brings together two key Japanese air cargo operators on the China-Japan route. SAMR revealed that after the merger of ANA and NCA, the company's share in the relevant market could pose a threat to competition. As conditions of approval, ANA made a number of commitments, including continuing to fulfill existing agreements for cargo ground handling, not refusing to renew relevant agreements, transferring certain flight slots, etc.
ANA announced the plan to acquire NCA in 2023 but has postponed the execution eight times, citing delays in regulatory processes.
САС Releases Updated Guideline on the Application for Security Assessment of Cross-border Data Transfers
The CAC released the third version of the Guideline on the Application for Security Assessment of Cross-border Data Transfers. The updated guideline simplifies the document submission process for companies transferring data overseas. The regulator has optimized the list of necessary documents, specified the conditions and procedure for extending previously obtained permits, and also set a deadline for submitting an application for an extension - at least 60 working days before the expiration of the current data transfer permit.
Source: Weixin
TikTok Lays off Employees in its US E-Commerce Division
TikTok is cutting more workers from its US e-commerce division, TikTok Shop.
“We’ve made the difficult decision to adjust parts of our team to better align with strategic priorities,” a spokesperson for the video-sharing app said in a statement. The company didn’t comment on how many employees are being cut.
TikTok Shop in the USA has been undergoing massive changes in recent months. After the failure to hit sales targets in 2023, the company cut personnel in April and May 2024.
Despite the changes, TikTok Shop has been the social media app’s fastest-growing business. Last year, TikTok Shop opened in five new countries in Europe, including Germany and Spain.
Source: Bloomberg
France Fines Fast-Fashion Giant Shein €40 Million
France’s antitrust agency had fined China-founded fast-fashion retailer Shein 40 million euros for alleged deceptive business practices including misleading discounts, following a nearly year-long probe.
Under French regulations, the reference price for any discount is the lowest one given by a retailer during the 30 days preceding the offer. Shein infringed that rule by not taking into account previous offers, and sometimes increasing the price before applying a discount, the agency said.
The probe, conducted across thousands of products on Shein's French site between October 1, 2022 and August 31, 2023, found 57% of advertised deals were not, in fact, offering a lower price; 19% had less of a discount than advertised; and 11% were in fact price increases.
Source: Reuters
China's Geely Launches in UK
Chinese automaker Geely has announced the launch of its Geely brand in Britain and its first vehicle to go on sale in the country will be the electric EX5 SUV, which will go on sale in the fourth quarter.
The automaker said in a statement that the EX5, which is still undergoing "intensive development work" to meet British car buyers' standards, will be the first in a "diverse range of high-quality, accessible vehicles tailored for the UK."
Britain is Europe's biggest market for electric vehicles and, unlike the European Union, has not imposed tariffs on Chinese-made electric cars.
Source: Reuters
