China Vows ‘Combination Punches’ on Cutthroat Competition
China’s top market regulator pledged on Sunday to deploy a package of coordinated measures—described as “combination punches”—to stamp out destructive “involution-style” competition, in which firms undercut one another to unsustainable levels, and to tighten scrutiny of the platform economy.
The remarks were made at a press conference held by the State Council Information Office in Beijing as part of its ongoing “Opening the Door to Start the 15th Five-Year Plan” series, according to The Paper, which carried the report by CCTV News. The speaking official, a representative of the State Administration for Market Regulation (SAMR), was not named in the report.
A Market That Both Admits and Expels
At the heart of the announced strategy is a push to make China’s markets more efficient at both ends of the business lifecycle—entry and exit.
According to China News Service, SAMR said it will optimize market-entity entry management, improve the foundational legal rules governing business registration, and deepen reform of the registered-capital subscription system, all with the aim of reducing institutional transaction costs and making it “more convenient for enterprises and entrepreneurs to enter and easier to handle affairs.”
On the exit side, the regulator said it will clear market-exit channels, pushing long-dormant and ceased enterprises—along with individual industrial and commercial households—to withdraw “safely and orderly,” so that the market can “have entry and exit, eliminating the stale and taking in the fresh.” The phrase reflects a long-standing Chinese policy goal of allowing unproductive firms to fail rather than keeping them alive through subsidies or forbearance.
Beyond Price Wars
To tackle involution directly, SAMR said it would draw comprehensively on standards leadership, price enforcement, and quality regulation. The stated goal is to guide firms toward investing in quality and efficiency improvements “rather than in low-price internal attrition.”
That framing marks a deliberate shift in emphasis. Rather than simply punishing discounting, the regulator is signaling that firms should compete on product quality and operational efficiency instead of racing to the bottom on price—a dynamic that has bruised margins across sectors from electric vehicles and lithium batteries to solar panels, home appliances, e-commerce, food delivery, and online hotel booking.
The announcement also reinforced the country’s antitrust apparatus. SAMR pledged to strengthen antitrust and anti-unfair-competition enforcement, improve technical capabilities for monitoring and early warning of monopoly risk, and raise the quality and efficiency of merger reviews. As Yicai reported, the remarks were delivered against the backdrop of the 15th Five-Year Plan preparations, underscoring the policy’s place in the next planning cycle.
Platforms in the Crosshairs
The most pointed language was reserved for platform companies. SAMR said it will further strengthen regulation of data, algorithms, traffic, and platform rules, and will press platforms to fulfill their “gatekeeper” responsibility—a term borrowed from global digital-market regulation that denotes the special obligations of dominant online intermediaries.
The emphasis is not theoretical. On September 19, Beijing’s municipal market regulator announced investigations into four online hotel and travel-booking platforms—Alibaba’s Fliggy, Meituan, Tongcheng, and Tujia—for suspected unfair competition, acting under SAMR’s deployment, as Lianhe Zaobao reported. That move followed a September 15 administrative guidance meeting between SAMR, the Ministry of Culture and Tourism, and major booking platforms including Meituan, Douyin, JD, Ctrip, Tongcheng, and Fliggy.
It also capped a year of escalating action. In July 2026, Ctrip—the country’s largest online travel platform—was fined more than 5.1 billion yuan for abuse of market dominance, in what regulators described as the first case of a new type of monopoly conduct.
A Year of Escalating Enforcement
The “combination punch” announced Sunday is better understood as an intensification of a campaign already well underway. Decades of breakneck growth in Chinese industry produced fierce, often self-defeating competition; in December 2024, the Central Economic Work Conference formally resolved to “comprehensively rectify” involution-style competition—the first time the term appeared at that level of policymaking.
Enforcement has since broadened considerably. According to a transcript published by China Food Safety News of SAMR’s July 7, 2026 press conference, the regulator carried out 16 special action campaigns with 39 expected outcomes in the first half of the year. It fined seven e-commerce platforms—Pinduoduo, Meituan, JD, Ele.me (Taobao Shangou), Douyin, Taobao, and Tmall—a combined 3.597 billion yuan for “ghost takeout” violations, with an additional 19.6874 million yuan levied on the platforms’ legal representatives and food-safety directors.
The same transcript detailed action against the freight platform Huoala, which was ordered to stop using algorithms to suppress freight rates; its commission rate fell from roughly 11 percent to about 9 percent, reducing driver burdens by more than 1.3 billion yuan a year and refunding 120 million yuan in unreasonable fees. It also recorded 11,465 anti-unfair-competition cases concluded in the first half of 2026—including 2,005 online false-advertising and commercial-disparagement cases—and 52 merger reviews completed in involution-prone sectors such as autos, solar, and lithium batteries, part of an effort to let consolidation serve as an orderly exit from hyper-competition.
Those figures help explain the language of “combination punches.” The regulator is not relying on a single lever but combining entry and exit reform, standards, price enforcement, quality oversight, antitrust, and platform-specific rules into one coordinated campaign.
What to Watch
The immediate question is how far the platform scrutiny will extend. The investigations into Fliggy, Meituan, Tongcheng, and Tujia are still at an early stage, and their outcomes—along with any broader sectoral probes—will test how aggressively SAMR is willing to translate rhetoric into penalties.
A second test lies in the exit reforms. Making it easier for dormant and failed firms to close could improve allocative efficiency, but it also carries social costs—job losses among individual businesses already under pressure—that will require careful handling. For now, the regulator’s message is clear: competition should reward quality and efficiency, not mere endurance in an escalating war of attrition.