Core Viewpoint - The article discusses the issue of "involutionary competition" in various industries, emphasizing the need for regulatory measures to promote product quality and orderly market competition, as highlighted in the recent Central Financial Committee meeting [1][5][6]. Understanding "Involutionary Competition" - "Involutionary competition" refers to a form of homogenized and disorderly competition, resulting in excessive investment without improving output efficiency, leading to resource misallocation [10][11]. - It manifests in two dimensions: horizontal competition among peers, characterized by over-investment and price wars, and vertical competition, where dominant firms transfer competitive pressure to suppliers and retailers, disrupting market order [11][12]. Causes of "Involutionary Competition" - The root causes include macroeconomic oversupply and microeconomic market failures. Oversupply leads to a negative cycle, while market failures can stem from blind investments and structural power imbalances [22][23]. - The article identifies the need to combat "involution" to achieve reasonable price recovery and promote sustainable innovation, shifting competition from price to value [31][35]. Effective Measures to Address "Involutionary Competition" - The current approach to combating "involution" is more market-oriented and legalistic compared to previous capacity reduction efforts, focusing on innovation and consumer demand [3][44]. - Industries likely to benefit from these measures include coal, steel, construction materials, chemicals, and emerging sectors like photovoltaic and electric vehicles, which are currently experiencing "involutionary competition" [6][66]. Regulatory Framework and Industry Response - Recent regulatory actions include collective production cuts in the photovoltaic glass sector and commitments from major automotive companies to limit payment terms to suppliers [6][9]. - The government has implemented various laws to ensure fair competition, such as the "Fair Competition Review Regulations" and the "Payment Guarantee for Small and Medium Enterprises" [9][17]. Industry Impact and Future Outlook - The article suggests that industries with significant "involutionary competition" characteristics, such as declining capacity utilization and increased sales expenses, should be closely monitored for the effectiveness of "anti-involution" policies [64][66]. - The transition from price competition to value competition is expected to enhance product quality and long-term profitability, aiding in the overall industrial upgrade and high-quality development [43][44].