China’s hypercompetition goes global as Beijing frets over backlash

China's "involution" a term for cutthroat domestic price competition and diminishing profit margins, is now a global phenomenon, particularly in the EV and AI component sectors. Chinese companies are pushing aggressively into international markets to offset anemic domestic demand, with overseas revenue for 3,775 publicly traded Chinese firms reaching a record 22.7% of total revenue last year. This export drive, however, is leading to accusations of dumping and trade friction, as seen with Germany's complaints and Brazil's increased tariffs on EVs. The core issue for Asian tech professionals is the sustainability of this model. While companies like Geely report higher profits on exported cars (RMB 12,000–15,000 per car) compared to domestic sales (less than RMB 3,000 for an NEV), overall profit margins for Chinese automakers dropped to 3.8% in the first half of 2026 from 8% in 2017. This suggests that even global dominance in market share is not translating into robust profitability. The thing to watch is how Beijing's "anti-involution" campaign, which includes warnings against exporting price wars, will balance with local governments' continued support for tech champions and their reluctance to shed idle capacity.