BEIJING (Reuters) -China’s state asset regulator has urged central government-owned enterprises to take the lead in opposing “involution-style competition” to help curb risks.
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.
Zhang Yuzhuo, head of the State-owned Assets Supervision and Administration Commission (SASAC), told a meeting that state giants should improve strategies by tapping internal potential, cutting costs, and boosting efficiency, according to a statement published Friday.
“It is necessary to take the lead in resolutely resisting “involution-style” competition, firmly pursue differentiated development and brand competition, strengthen industry self-discipline, and guide the industry towards healthy, sound, and sustainable development,” Zhang said.
The meeting held on Thursday was attended by representatives from six major SOEs including China Coal, China Mobile and Poly Group, the regulator’s statement showed.
Efforts should be made to strengthen risk prevention, further improve risk monitoring and early warning mechanism, strengthen risk management in key business areas, Zhang said.
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.
(Reporting by Beijing Newsroom and Kevin Yao; Editing by Toby Chopra)
