In response to deflation and eroding profits from hyper-competition, the Chinese government's "anti-evolution" policy is a deliberate strategy to force consolidation, reduce overcapacity, and restore pricing power, thereby boosting corporate return on equity.
China's airline industry, despite persistent losses, is a surprising beneficiary of the "anti-evolution" strategy. The sector doesn't suffer from seat oversupply, and strong regulatory coordination, rather than capacity cuts, could drive a significant turnaround.
China's campaign against "evolution" (excessive competition) is not a broad economic stimulus. It specifically benefits sectors like EV batteries, steel, and cement where state control or rapid market consolidation can restore pricing power and profitability.