Overview

• China’s State Council and Cabinet have publicly committed to curb “irrational competition” by intensifying oversight of costs, prices and product quality in strategic manufacturing sectors.
• The top 10 solar panel glass producers agreed on June 30 to cut output by 30%, and authorities have launched a nationwide auto safety inspection campaign to tackle quality concerns.
• Officials are steering competition away from price undercutting toward technological innovation to stabilize profits and address a three-year slide in the producer price index.
• China’s producer price index has fallen steadily for nearly three years, reflecting persistent deflation driven by cutthroat price wars in EVs, solar panels and other industries.
• Stocks in overcapacity-hit sectors such as steel, solar and electric vehicles have rallied on investor optimism that government intervention will restore profitability.