Noahpinion • 22412 implied HN points • 20 Jun 25
- China's industrial policy is pushing many manufacturers to compete heavily for a limited domestic market. This competition is driving down profit margins as companies fight for customers.
- Despite heavy government support and subsidies, many Chinese manufacturers are struggling with profitability and facing price wars that could lead to bankruptcies. This creates a risk of economic instability.
- The focus on making more products instead of better ones can hurt innovation. Companies under financial pressure might not invest in long-term improvements and could rely on cheap prices to sell their goods.