Price wars without efficiency boosts must come to an end

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In recent months, regulators have stepped up scrutiny of subsidy-driven price wars among e-commerce platforms and penalized unfair competitive practices. The aim is not to stop…

Imagine a crowded theater where one person stands up to get a better view. Soon, everyone follows suit, and the result is that everyone is standing, yet no one can see better than before. The only change is that watching the show has become more tiring.

This analogy aptly describes China's current debate over "involutionary" competition — a scenario where businesses continuously intensify their efforts without meaningful gains.

In recent months, regulators have stepped up scrutiny of subsidy-driven price wars among e-commerce platforms and penalized unfair competitive practices. The aim is not to stop companies from lowering prices but to prevent price cuts from becoming a contest that drains resources while doing little to improve products, services or productivity.

Low prices per se are not a problem. A new electric-vehicle maker may cut prices to enter the market or a retailer may offer…

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