NDRC involution-style competition AI+
Key Points
- NDRC (国家发展和改革委员会) directive — Dec 12–13, 2025: call to comprehensively rectify “内卷式竞争” by curbing redundant capacity additions, predatory pricing and subsidy-driven expansion that waste resources and lower sector profitability.
- Dual focus on regulation + growth: the agenda pairs tighter oversight of unhealthy competition with active measures to cultivate new growth drivers, signaling enforcement against short‑term, zero‑sum tactics and support for strategic industries.
- Major push to scale “AI+” (人工智能+): accelerated cross‑sector AI adoption, pilot funding and ecosystem support — vendors that demonstrate auditability, compliance and measurable ROI will be prioritized for public and private procurement.
- Winners and sector tailwinds: companies showing operational discipline, measurable unit economics and credible AI deployment are best positioned; expect policy support for AI, 数字经济, 低空经济 and science & technology services.
The National Development and Reform Commission (Guójiā Fāzhǎn Hé Gǎigé Wěiyuánhuì 国家发展和改革委员会, NDRC) said at the nationwide development and reform work conference held in Beijing on December 12–13 that authorities must solidly prepare next year’s development and reform priorities.
The meeting stressed a combined approach to reining in “involution-style” competition (nèijuǎnshì 内卷式竞争) while cultivating and developing new economic drivers.
Key policy directions announced
- Comprehensively address and rectify “involution-style” competition (nèijuǎnshì 内卷式竞争), reducing redundant, unhealthy rivalry that wastes resources and lowers overall productivity.
- Improve capacity governance in key industries and strengthen macro-level regulation of major infrastructure projects.
- Vigorously nurture and scale emerging industries and future-facing sectors; cultivate several new emerging pillar industries to diversify growth drivers.
- Deepen and expand the “Artificial Intelligence +” (Réngōng Zhìnéng + 人工智能+) action — accelerating cross-sector AI adoption and supporting related ecosystems.
- Address gaps in the science & technology service industry to better support innovation commercialization and industrial application.
- Improve the industrial ecosystem of the low‑altitude economy (Dīkōng Jīngjì 低空经济) and continue promoting high‑quality development of the digital economy (Shùzì Jīngjì 数字经济).
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What “involution-style” competition means for companies and regulators
The phrase “involution” (nèijuǎn 内卷) here refers to excessive, zero-sum competition that delivers diminishing returns for firms and the economy.
The NDRC’s call to “comprehensively rectify” this type of competition signals that regulators will be looking to limit business practices that prioritize short‑term market share battles, aggressive discounting, over-expansion, or other behaviors that erode industry profitability and social welfare.
Expect enforcement and guidance aimed at:
- Reducing repetitive capacity additions in industries where supply already outstrips sustainable demand.
- Discouraging predatory pricing, wasteful subsidy races, or excessive marketing wars that transfer value away from productive investment.
- Encouraging consolidation, standardization, or other orderly mechanisms to improve sector efficiency.
- Aligning local incentives with national goals so that municipal competition does not drive harmful “scale chasing”.
Practical implications for companies
If you run a growth-stage company, this means your playbook should shift from raw expansion to measurable unit economics and sustainable capacity planning.
Investors should watch for companies that can demonstrate:
- Clear demand-side metrics instead of just top-line growth.
- Disciplined capital deployment and avoidance of subsidy-driven customer acquisition strategies.
- Pathways to consolidation or meaningful differentiation that reduce incentives for destructive price wars.
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Why “AI+” and related measures matter
By emphasizing deeper expansion of the “AI+” program (Réngōng Zhìnéng+ 人工智能+), the NDRC is signaling continued top‑level support for integrating artificial intelligence across manufacturing, services, healthcare, education, publishing, logistics, and infrastructure planning.
Key implications:
- Stronger demand for AI tools, platforms, and system integrators as government and industry adopt AI‑enabled workflows.
- Increased emphasis on building the science & technology services sector — for example, testbeds, certification, algorithm auditing, and applied R&D services.
- Potential policy support (funding, pilot queues, regulatory guidance) for cross‑industry AI pilots, especially in areas prioritized as “new and future industries”.
What this means for the AI ecosystem
Expect budgets and procurement to favor vendors that can show compliance, auditability, and practical ROI in pilot projects.
System integrators and platform providers that offer end‑to‑end solutions — from model development to deployment and compliance workflows — will be better positioned for public and private pilots.
Service firms that help with certification, algorithm audits, and domain-specific data labeling will see steady demand as AI becomes embedded across regulated sectors.
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Sectors likely to see policy tailwinds
- Artificial intelligence and AI‑enabled software/platform vendors.
- Digital economy businesses: cloud providers, data infrastructure, cybersecurity, and digital services (Shùzì Jīngjì 数字经济).
- Low‑altitude economy components: drone manufacturing, urban air mobility services, logistics, and related regulatory/compliance services (Dīkōng Jīngjì 低空经济).
- Science & technology services: labs, standards bodies, testing and validation companies, and consultancies that help commercialize tech.
- Emerging industries identified as strategic pillars — companies positioned in those niches may attract preferential support.
Bottom line for investors and business leaders
The NDRC message combines two themes: curbing unproductive, wasteful competition and actively creating favorable conditions for forward‑looking technologies and industries.
Firms that can demonstrate efficient capacity use, responsible competition practices, and clear plans to deploy AI and digital capabilities are better positioned for support.
Conversely, businesses primarily competing on short‑term incentives or expanding capacity without clear demand may face regulatory scrutiny.
Recommended tactical checklist for founders and investors
- Audit customer-acquisition economics and eliminate subsidy-dependent growth channels.
- Document capacity utilization and tie expansion plans to verified demand signals.
- Prioritize AI pilots that have measurable productivity or cost-saving outcomes.
- Build compliance and audit readiness for models, especially in regulated verticals like healthcare and logistics.
- Explore partnerships with labs, testing centers, and standards bodies to accelerate commercialization and visibility.
Bottom line: The NDRC’s dual push to clean up “involution-style” competition and expand AI+ means the winners will be those who pair operational discipline with credible plans to deploy AI and digital infrastructure at scale.
NDRC involution-style competition AI+
