China’s Had Enough of Its Own Toxic Price Wars
Escalating discounts are hurting businesses up and down the supply chains, as well as altering consumer behavior.
Feeling the pinch.
Photographer: Qilai Shen/BloombergChina’s Politburo, its most powerful political body, meets four times a year to discuss the country’s leading economic and social issues. In the meeting last month, top policymakers pledged to boost consumer spending and curb “vicious competition” among businesses. The wording was unusually direct; its leaders are known more for opaque signaling that can lead to multiple interpretations.
From bubble teas and electric vehicles to areas as new as generative AI, companies are undercutting each other, vying for a consumer base that’s getting ever more thrifty in this prolonged economic downturn. EV maker BYD Co., for instance, has cut prices on more than 100 existing models this year, worsening a race-to-the-bottom kickstarted by Tesla Inc. in late 2022. In June, manufacturers were on average offering an 8.6% discount, according to data compiled by HSBC Holdings Plc.