China moves to curb price wars (“involution” again), weighs national M&A fund

China is moving to curb excessive price competition and promote industrial restructuring with new policy initiatives. At a State Council briefing, NDRC Vice Chairman Wang Changlin announced plans to intensify efforts to eliminate 'disorderly' low-price competition across key sectors. The aim is to shift the focus from price wars to quality, branding, and value-added production, in alignment with Beijing's objective to stabilize corporate margins and alleviate deflationary pressures. In addition, the NDRC is exploring the establishment of a national-level M&A fund to accelerate the development of 'new quality productive forces' through consolidation and innovation. This fund would enhance coordination between government investment vehicles and existing structures, facilitating capital flow into strategically important sectors while minimizing inefficient competition. These initiatives highlight a shift toward supply-side discipline and corporate restructuring. They reflect growing concerns that price wars are contributing to deflation and eroding profits in the private sector. The market response anticipates increased regulatory oversight, potential consolidation opportunities, and renewed efforts to stabilize industrial profitability amidst slower growth and global competition.