The Chinese government has launched a campaign to reduce offensive prices by domestic companies, warning the regulators that increases excessive competition and damages economic stability. As reported by Reuters, this “anti -dissolution” drive responds to the rising inflation pressures due to overcrowding and cruel wars.
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The data on the Indexbox platform highlights the profound impact on corporate profitability, especially in the electric vehicle sector. Net net profit margins for 33 carmakers listed in 2024 decreased by 0.83 %, a dramatic fall from 2.7 % in 2019. This compression is a direct result of intense competition, an example of a price war that erupted in 2023 brands such as BYD and TESLA.
The solar industry faces a similar crisis. The enormous capacity has caused damage to the photovoltaic value chain, estimated at $ 40 billion last year. Despite the start of reconstruction, China’s current production capacity for wafers, cells and modules is sufficient to meet worldwide demand through 2032. Other sectors exposed to these malicious dynamics include lithium, steel, cement and food delivery, where technical giants burns billions to gain market share.
Economists point out that changing consumer behavior, due to expectations of always prices, reduces inflation. It creates significant challenges for policymakers and complicates the effort to consolidate the $ 19 trillion economy. This is more pressure on the factory’s profits with unresolved trade disputes with the United States and President Donald Trump. With the unemployment of youth with 17.8 %, Beijing’s shows that inhibit this pressure for social stability.
Source: Indexbox market information platform
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