From March 17 to 18, 2025, General Secretary of the CPC Central Committee, President of the People’s Republic of China, and Chairman of the Central Military Commission Xi Jinping visited Guizhou. Xi Jinping stressed that we should resolutely break down local protection, market segmentation, and “intra-roll” competition, and create a stable, fair, transparent and predictable environment for entrepreneurship and innovation in the whole society.
Chinese President Xi Jinping, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, made an inspection tour in Guizhou Province from March 17 to March 18, 2025. Xi demanded resolve efforts to eliminate local protectionism, market segmentation and “rat race” competition to create a stable, fair, transparent and predictable environment for businesses.
【Knowledge Points】
“Inverse” competition refers to the phenomenon that in a certain field or industry, due to the fierce competition, participants will not hesitate to invest excessively in order to compete for limited resources and opportunities, which ultimately leads to waste of resources and reduced efficiency. This competition model violates the basic laws of economic operation and is also the enemy of promoting fair competition in the market, stimulating innovation vitality, and improving development efficiency. In recent years, “in-roll” competition has been particularly prominent in the fields of automobiles, lithium batteries, photovoltaics, etc. In order to compete for limited market share and resources, some companies have to invest a lot of manpower, material resources and financial resources to conduct repeated construction, and are trapped in vicious competition and ignore the importance of technological innovation and industrial upgrading. This short-sighted behavior not only weakens the core competitiveness of the company, and has a bad impact of “bad money drives out good money”, but will also hinder the development of the industry. With the rapid development of my country’s platform economy, the “intra-roll” competition is becoming increasingly fierce. In order to attract consumers, some platforms have implemented rules such as “automatic price follow-up” and “lowest price on the entire network”, forcing merchants to fall into a price war and cannot focus on improving product quality and service levels. The “in-roll” competition is diverse. In order to achieve the purpose of attracting investment and implementing industries, some local governments have introduced a large number of convenient policies, such as “building factories on behalf of others”. Although these policies have attracted enterprises to a certain extent, they also ignored market laws, promoted the “short-term arbitrage” behavior of some enterprises, increased local fiscal burdens and the risk of unfinished projects, and in turn aggravated the “internal consumption” of economic development and hindered the formation of a unified national market. In the long run, “intra-roll” competition will not only affect the long-term competitiveness of the industry, interfere with market order, make investors and entrepreneurs lose confidence, but will also hinder the virtuous economic cycle.
The central level has been concerned about the issue of “intra-roll” competition for a long time. On July 30, 2024, General Secretary Xi Jinping presided over a meeting of the Political Bureau of the CPC Central Committee. The meeting proposed for the first time to strengthen industry self-discipline and prevent “intra-roll” vicious competition. In December of the same year, the General Secretary attended the Central Economic Work Conference. The meeting emphasized that “internal” competition should be comprehensively rectified and the behavior of local governments and enterprises should be standardized. On March 5, 2025, on the opening day of the Third Session of the 14th National People’s Congress, the General Secretary emphasized when participating in the deliberation of his Jiangsu delegation that it is necessary to deepen the reform of market-oriented allocation of factors and actively break down local protection, market segmentation and “internal-coil” competition.
How to crack the “inverse” competition? The central government has already taken action. In January 2025, the “Guidelines for the Construction of a National Unified Market (Trial)” was released. The guidelines clearly state that efforts should be made to break down local protection and market division, and that all regions should not break through the red line and bottom line stipulated by the state when implementing preferential policies for investment promotion in finance, taxes, prices, land, resources and environment. The issuance of this document will inevitably force local governments to regulate investment promotion behavior and accelerate the transformation of traditional investment promotion models. Previously, various industries also began to make spontaneous rectifications. In October 2024, my country’s photovoltaic industry fired the first “anti-involvement” shot. In the same month, 12 wind power complete manufacturers signed a self-discipline convention, which clearly stated that “products or services shall not be sold at prices lower than their costs.” These industry companies have set a good example for breaking “involved” competition with specific actions.
【Important Speech】
We must deepen the reform of market-oriented allocation of factors and actively break down local protection, market segmentation and “intra-roll” competition. We must fully implement the spirit of the private enterprise symposium, treat enterprises of all ownership equally, and continuously optimize the business environment. We must steadily expand institutional opening up and continuously expand the space for international cooperation.
It is important for the province to deep reform on market-based allocation of resources, and take the initiative to address issues such as local protectionism, market division and “rat race” competitions. It is essential to fully implement the guiding principles of the symposium on private enterprises held in February, treat all enterprises equally no matter what their ownership is, and make sustainable efforts to improve the business environment. It is important to steadily expand institutional opening up and create more room for international cooperation.
——On March 5, 2025, Xi Jinping’s important speech during the deliberation of the Jiangsu delegation at the Third Session of the 14th National People’s Congress
【Related Words】
Fair competition review mechanism
fair competition review mechanism
Local protectionism
local protectionism
China Daily Network English Dots and Tianjin Studio (this article was first published on the “Study Strong Country” learning platform)
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[Editor in charge: Chen Danni]
