Economic Daily Critiques Involution in Emerging Industries: Homogeneous Competition Squeezes Innovation, Specialized Division Needed

Currently, some Chinese emerging industries face a peculiar competitive dilemma: when a new trend emerges, various regions rush to launch similar projects, resulting in redundant production lines and highly homogeneous products. This pattern, officially termed "involutionary" competition, not only causes resource waste but also fundamentally constrains industrial upgrading. In an article published on October 16, 2026, Economic Daily commentator Huang Xin dissected the causes, harms, and solutions to this phenomenon, providing a clear industrial analysis framework for investors and policy observers.

The article points out that "involutionary" competition is not accidental but the result of multiple overlapping real-world factors. First, there is a tendency towards short-term political performance orientation; emerging industry projects attract high social attention and can quickly form visible results, prompting local governments to blindly follow trends. Second, regional competition falls into a "prisoner's dilemma," where locals fear missing out on industrial booms, creating a development model characterized by "grabbing projects, stacking policies, and neglecting supporting infrastructure." Additionally, positive market expectations for emerging industries easily attract capital to enter competitively, causing capacity growth to far exceed demand expansion. Finally, at stages where new technologies have not yet broken through, most enterprises can only compete within mature processes, relying on price wars to fight for existing markets.