Beijing Summons 17 Platforms to Limit '618 Involution'; Subsidy Wars Were Just Encouraged, Now Halted

The Beijing Market Supervision Bureau recently summoned 17 key platform companies on the eve of the "618" e-commerce promotion, demanding that platforms "eliminate irrational large-scale subsidy promotions" and implement the requirements for "comprehensive rectification of involutionary competition."

According to information released by the Beijing Market Supervision Bureau on May 25, the meeting was organized by the Beijing Network Market Supervision Joint Meeting. Regulatory authorities required platforms to standardize pricing and advertising marketing behaviors, and strengthen food safety risk prevention and control. The Beijing Municipal Bureau of Commerce emphasized the need to "adhere to the bottom line of honest operation" and "fair competition operating principles."

In other words, while in previous years they were desperately encouraging platforms to spend money, with consumer coupons flying everywhere and local governments personally intervening to "stimulate domestic demand," they are now suddenly criticizing "subsidy involution." China's policy machine has once again completed its classic move: yesterday they disliked you for not spending, today they dislike you for engaging in fierce price wars; yesterday they encouraged platforms to burn money to seize market share, today they say you are disrupting competitive order.

In the past few years, the Chinese economy has been in continuous decline, and resident consumption has been weak. Local governments and platforms have successively introduced "consumption promotion" policies. Whether it was home appliance subsidies, car subsidies, consumer coupons, or live e-commerce and instant retail wars, officials have always strongly supported them, demanding that enterprises "stimulate consumption potential." Many local governments even directly subsidized platform activities with public funds to create so-called "consumption recovery" data.

However, at the same time, such administrative-led market stimulation has long been accompanied by resource misallocation, data fraud, and interest transfer. Some subsidy projects were cashed out by merchants, transaction volumes were inflated, and even phenomena like "raising prices first and then subsidizing" occurred. A large number of platforms, driven by policy trends, burned money frantically, only to enter a state of contraction in an instant due to a regulatory statement about "preventing disorderly expansion" and "anti-involution."

This kind of back-and-forth is not unprecedented.

The real estate industry is the most typical example. The CCP authorities had long encouraged high-leverage expansion, shaping real estate into a "pillar industry"; then they suddenly introduced the "three red lines" to forcefully deleverage; after the property market collapsed and local finances deteriorated, they relaxed purchase restrictions, lowered down payments, and rescued property developers. Within a few years, policy directions have changed drastically multiple times, and a large number of enterprises and ordinary homebuyers have been harvested back and forth.

The platform economy is similar. Around 2020, the CCP once encouraged internet platforms to "innovate and develop"; then a concentrated crackdown on tech giants erupted, including antitrust fines, data regulation, and the zero-tolerance crackdown on the education and training industry. Now, with the economic downturn and severe youth unemployment, the authorities are once again calling for support for the private economy and stabilizing the expectations of platform enterprises, but at the same time, the hand of administrative regulation can still fall at any moment.

Many analyses believe that the biggest uncertainty in the Chinese market is not enterprise competition itself, but the lack of stability and boundaries in government policies. Today, the authorities encourage "consumption upgrades," and tomorrow they regulate "disorderly expansion of capital"; today they require platforms to expand investment, and tomorrow they criticize "malicious subsidies."

This kind of decision-making governance, which is essentially made on a whim, does not optimize the allocation of market resources, but rather represents the continuous intervention of administrative power in economic operations. With frequent changes in policy direction, enterprises can only constantly try to guess the regulatory trends, while the departments that truly hold resource and approval power always have room to redistribute benefits.

So-called "anti-involution" ultimately does not mean establishing fair and transparent market rules, but rather resembles a policy loophole that can be used at any time. When competition is allowed and when it is not, it does not depend on the market itself, but on how the regulatory authorities define it on a given day.

Against the backdrop of a continuously declining economy and weak consumption, Beijing's braking of the "618" subsidy war this time once again reveals the chaos and contradictions within China's policy system: they want people to consume but fear platforms burning money; they want to maintain growth data but fear competition getting out of control; they want market vitality but are always reluctant to let go of that restless hand.