China's market regulator, the State Administration for Market Regulation (SAMR), has issued warnings to major technology companies to reduce 'involutionary competition' as they compete aggressively in offering promotional giveaways ahead of the Lunar New Year. This type of competition, referred to as 'involution' or neijuan, involves unsustainable practices that lead to reduced quality and innovation. The SAMR has called upon these firms to create a fair and competitive marketplace that encourages creativity and growth rather than cutthroat rivalry.

The regulator did not specify particular companies or actions but underscored the need for overall compliance with guidelines designed to maintain a balanced economic environment. The SAMR emphasized that the tech giants must work collaboratively to foster an ecosystem that supports healthy development, which is particularly crucial in various sectors including electric vehicles and food delivery services that are currently experiencing high competition.

As companies ramp up promotional activities in a bid to win over consumers during the festive season, the government’s call to action highlights its role in managing market practices to ensure long-term sector health. By addressing the issue of involution, the Chinese government aims to curb economic pressures on businesses and promote sustainable, innovative competition that aligns with China's broader economic goals.