China Pushes for Unified National Market Regulation to Curb “Involutionary” Competition

Between 10 and 11 December, Chinese leadership announced plans to formulate a Unified National Market Construction Regulation in China’s annual Central Economic Work Conference, explicitly targeting the deepening rectification of “involutionary” competition, a term describing destructive, zero-sum rivalry within saturated markets across the economy.

This initiative represents a significant advancement in China’s multi-year strategy to dismantle local protectionist barriers and integrate its vast domestic market. It builds on a foundational policy document Opinions on Accelerating the Construction of a Unified National Market issued in April 2022 (see our previous coverage) and a series of subsequent rules on fair competition and market access such as Regulation on Fair Competition Review, Opinions on Improving the Social Credit System, and Market Access Negative List (2025). The new Regulation is intended to provide a stronger legal and institutional framework to solidify these reforms.

Analysts frame the move as essential for shifting the economic growth model. “‘Involutionary’ competition has become a major obstacle to building our unified national market,” stated Jin Li, Vice President of the Southern University of Science and Technology. He explained that such competition traps enterprises in price wars and homogeneous marketing battles, draining resources that could be used for technological innovation and industrial upgrading.

Following the high-level policy announcement, concrete implementation steps were outlined by the National Development and Reform Commission (NDRC) in a late-December press conference. Li Chao, an NDRC spokesperson, described building the national unified market as both a “tough battle and a protracted war,” noting that its foundational framework has now been largely established. Moving forward, the NDRC will pursue a two-pronged approach to deepen reforms. On the institutional side, key priorities include finalizing the aforementioned national market regulation, publishing a specific negative list of local practices that impede market unity, and introducing new guidelines to foster higher-quality investment promotion. Conversely, on the enforcement side, the focus will be on dismantling existing barriers, with a continued crackdown on issues like non-compliant local tax rebates and discriminatory practices in government tendering. To bolster these efforts, the NDRC will actively gather public reports on market obstruction and periodically publish typical cases, leveraging transparency and legal guarantee as key enforcement tools.

In conclusion, China’s unified national market strategy reshapes the landscape for foreign firms. Long-term, it promises fairer access, lower compliance costs, and competition based on innovation, not local protectionism. Short-term, firms must adapt swiftly to new national rules, as reliance on local advantages diminishes and competition with strengthened domestic rivals intensifies.

Chinese sources of the article: https://www.gov.cn/zhengce/202512/content_7050991.htm