The phenomenon of involution-style vicious competition in China's manufacturing industry mainly occurs in the general manufacturing sector, where there is a long-standing governance problem of expanding production capacity, resolving production capacity, and continuing to expand production capacity. There is also a low-level competition phenomenon of lowering the threshold again and again, reducing costs again and again, and giving up space again and again in local investment promotion policies. Currently, the existence of backward and inefficient production capacity in the general manufacturing industries and the vicious competition among them are the main factor hindering China's economic recovery, preventing us to enter the normal development sequence. To resolutely prevent the involution-style vicious competition, the institutional design guided by the principle of survival of the fittest is a prerequisite, especially emphasizing the innovation of industrial policies.
This article proposes policy recommendations to prevent the involution-style vicious competition in the manufacturing industry through analysis.
1. Standardize the support behavior of local governments and encourage industries to engage in differentiated competition.
2. Expand market size and optimize market structure.
3. Innovate industrial policies.
