Explainer-What is "involution", China's race-to-the-bottom competition trend?

Sun, Sep 14, 2025, 7:07 PM 4 min read

By Casey Hall

SHANGHAI (Reuters) -China's leaders have pledged to put an end to aggressive price cuts by some Chinese companies which regulators say are spurring excessive competition that is damaging the economy.

The so-called "anti-involution" campaign has been sparked by overcapacity among Chinese manufacturers - a legacy of past government efforts to stimulate the economy - and price cuts made to clear stock or spur consumption. Those cuts have prompted price wars across various sectors that are raising concerns deflation may become entrenched and hinder efforts to stabilise China's $19 trillion economy.

WHAT IS INVOLUTION?

The Chinese term for involution, "neijuan", began trending online in 2020 and was initially used by young people to describe the hypercompetitive and often self-defeating pursuit of traditional markers of success.

Some of the contexts they used it in included questioning what was the point of working hard to get into a good school if the reward was working 996 hours (9 a.m. to 9 p.m., six days per week) in a tech company? If you were lucky enough to land a job, that is, in an era of high graduate unemployment.

Though the term is far less commonly used in English, involution comes from a latin term which means "to roll or turn inwards". It was popularised by American cultural anthropologist Clifford Geertz in the 1960s - in relation to his studies of Javanese agriculture - to describe economic or cultural stagnation despite increasing complexity or effort.

More recently, neijuan has become shorthand in China for the exhausting but also often futile and sometimes self-destructive grind of hyper-competition more broadly.

The concept is now also linked to the country’s pivot from property-driven growth to an industrial complex encompassing a third of global manufacturing, which has seen more recources invested without any accompanying increase in returns. It's a race to the bottom.

WHY IS COMPETITION A BAD THING?

On social media in China there is an oft-repeated joke that goes something like this: In other countries, governments intervene to prevent anti-competitive behaviour; here (in China), they intervene to curb competition.

The issue is that the level of competition has reached a point where the returns are not only diminishing, they are threatening economic stability.

Beijing is facing decisions to take action against overcapacity, excessive competition and brutal price wars because deflationary pressures have been mounting in the world's second-largest economy.