On 1 August, China’s state planner announced a crackdown on “herd behaviour” in emerging industries, targeting the surge of capital into hot sectors such as electric vehicles, batteries and solar.

Officials warned against “blind imitation” where firms large and small pile into the same space, sparking price wars and overcapacity.

This frenzy, often dubbed  _neijuan_ or “involution” in China, has become a major liability. The new rules aim to prevent chaotic boom-bust cycles and enforce investment discipline, even as innovation is still encouraged.

This is a necessary shift as industries, including EVs and solar, are drowning in excess capacity and collapsing margins. Beijing is now steering away from brute-force growth, towards high-quality development, where standards and sustainability matter more than speed.

Rather than a retreat inward, this is a strategic reset that will reshape how Chinese capital moves globally, especially in Southeast Asia. By cooling speculative excess at home, China is preparing its firms to expand abroad more selectively and sustainably. Nowhere will this be felt more than  in Southeast Asia, where Chinese money........

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