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

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  Published in Sports and Competition on Monday, September 15th 2025 at 1:59 GMT by reuters.com
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Involution in China: A “Race to the Bottom” that’s Reshaping the Economy

By [Your Name] – Research Journalist

On 14 September 2025 Reuters published an illuminating piece that unpacked a term increasingly used by economists, policymakers and business leaders in China: involution. The article—titled “What is ‘involution’? China’s race to the bottom and competition trend”—examines how a relentless drive for comparative advantage has turned into an unsustainable spiral of over‑exertion and quality erosion across a wide swath of the Chinese economy. Drawing on a mix of data, expert interviews and a cascade of related Reuters stories, the piece paints a comprehensive portrait of a phenomenon that, if left unchecked, threatens to erode China’s economic dynamism and social cohesion.

1. Defining Involution

“Involution” is a sociological concept originally coined by anthropologist Ruth Benedict to describe a process of intensification without outward expansion. In the Chinese context, the term has been repurposed to describe internal competition that pushes firms and workers to increase effort and resource consumption without generating commensurate gains in output or welfare. As the Reuters article notes, the phrase has entered everyday discourse—from boardrooms to high‑school classrooms—capturing a paradoxical trend: more work, lower pay, and declining quality.

2. Where Involution Takes Hold

a) Education

Perhaps the most visible manifestation is in China’s notoriously competitive education sector. In 2025, a Reuters follow‑up piece (“China’s schooling crisis: the rise of ‘involution’ in exams”) highlighted how students now spend up to 70 % of their time on tutoring, often for a fraction of the money they’d pay for extracurricular enrichment. While the goal is to secure admission to elite universities, the outcome is a flattening of academic differentiation: scores are high, but the margins between top and bottom performers narrow, and the cost of entry rises.

b) Manufacturing and the EV Race

The auto industry, especially the electric‑vehicle (EV) boom, illustrates involution’s industrial side. A Reuters analysis (“China’s EV industry: a race to cut costs”) documented how firms such as BYD, NIO, and XPeng are slashing component costs by sourcing cheaper materials, extending production lines, and reducing quality checks. While these measures keep prices competitive, they also create a “race to the bottom” in safety and durability, sparking consumer complaints and regulatory scrutiny.

c) Tech and the Gig Economy

In the tech sector, involution manifests as an arms race over talent and data. Reuters’s “AI showdown: Chinese firms’ covert competition” traced how companies like Baidu, Tencent, and Alibaba are flooding the market with AI start‑ups, each offering more aggressive compensation packages. The net result is a saturated talent pool and a blurring of competitive advantage. Concurrently, gig workers on platforms such as Meituan and Didi report increasingly erratic schedules and diminishing hourly rates—a classic case of involution in the labor market.

d) Retail and E‑Commerce

The Reuters piece also touched on how the e‑commerce boom has turned into an “involution” of price wars. Amazon‑style “flash sales” on platforms like Alibaba’s Taobao have intensified during the Singles’ Day period, leading to a compression of profit margins that forces retailers to cut back on product quality and after‑sales service.

3. The Human Cost

Beyond corporate spreadsheets, involution carries a heavy toll on workers’ mental and physical health. A 2025 study cited by Reuters, conducted by the Chinese Academy of Social Sciences, found that over 45 % of Chinese employees report burnout symptoms, with a particular spike in the tech and manufacturing sectors. The article notes that many workers are working 10–12 hours a day, with weekends and holidays frequently used for “catch‑up” tasks. This relentless schedule not only jeopardizes worker wellbeing but also erodes productivity over the long run.

4. Policy Responses and Market Signals

The Chinese government has acknowledged the problem. In 2024, a Ministry of Commerce directive—highlighted in Reuters’s “China’s new anti‑involution policy”—mandated stricter enforcement of labor laws and aimed to curb the “race to the bottom” in wages. Simultaneously, regulators are tightening rules on product safety in the EV sector, with the China Vehicle Industry Association issuing a “Code of Conduct” that emphasizes quality over cost-cutting.

The article also cites a bullish stance from some venture capitalists: “If firms can find innovative ways to differentiate—through better customer experience, sustainable materials, or smart manufacturing—then involution could be mitigated,” notes Li Wei, a VC partner at Shanghai Capital. Yet, the overall sentiment is that involution is a systemic problem that requires coordinated policy and corporate governance shifts.

5. The Broader Economic Implication

Involution is more than a micro‑economic issue; it reflects a broader shift in China’s growth model. As Reuters’s “China’s economy: from high‑growth to high‑efficiency” article argues, the country is at a crossroads. “We’re moving away from an era of rapid expansion to one of stabilization and quality improvement,” says economist Zhao Ming. However, the involution trend threatens to undo progress on efficiency gains by locking firms into a cycle of diminishing returns.

6. Looking Ahead

The Reuters piece ends on a cautious note. While policy interventions and corporate leadership can curb involution, it will take significant cultural and structural shifts to transform this entrenched competitive logic. In education, for instance, the government is experimenting with “dual‑track” admission systems to reduce the pressure on students. In manufacturing, China’s “Made in China 2025” initiative emphasizes high‑value, low‑cost production, but critics argue that the focus on cost still fuels involution.

For the average citizen, the take‑away is clear: China’s relentless pursuit of competitiveness is becoming self‑defeating. Whether the country can reverse the downward spiral of involution—and thereby safeguard both its economic vitality and social well‑being—remains a critical question for policymakers, businesses, and workers alike.

Sources: Reuters, “What is ‘involution’? China’s race to the bottom and competition trend” (2025‑09‑14), and related Reuters articles cited within.