In a recent statement, Zhong Shanshan, former richest man in China and chairman of Nongfu Spring, pointed out the intense competition among e-commerce platforms in China. He expressed his concern that these platforms, as special intermediaries, have essentially “killed off” many retail businesses in urban areas. According to Zhong, e-commerce platforms are drawing in young people to their phone screens, stifling their creativity and sensibility in consumption, and he advocates for the need to limit the power of these platforms.
Zhong’s remarks have sparked discussions, with some commentators linking his views to the recent crackdown trends by the Chinese Communist Party.
During a broadcast on August 8 on CCTV’s financial program, Zhong Shanshan, founder of Nongfu Spring, discussed the issue of price cannibalization in the Chinese economy. He highlighted that e-commerce platforms, as distinctive intermediaries, are pervasive and have essentially wiped out many retail businesses in cities.
Zhong believes that many shops in cities are driven by emotional consumerism, which has now been stifled. He questions, “Where is the creativity and sensibility when all the young people are drawn into their phone screens?” Therefore, he argues for the necessity to limit the platforms’ power.
He emphasized the importance of not focusing solely on increasing prices without considering the quality. Zhong stressed that not pursuing premium levels of products represents the most destructive form of competition to social productivity.
In response to this, mainland China commentator Liu Yuanju wrote an article titled “Even the richest opposes market economy, the situation is tough for the market economy in China.” The article emphasizes the importance of recognizing the rationale behind “market determinism” and not questioning legitimate business models within a market economy using planned economy concepts.
The Central Political Bureau of the Chinese Communist Party held a meeting on July 30, 2026, where they mentioned the need to “promote the healthy development of the platform economy” and comprehensively rectify “cannibalistic” competition and more.
Professor Henry Gao from the Law School of Singapore Management University expressed in a post that started 60 years ago during the Cultural Revolution with Yao Wenyuan criticizing Wu Han’s “Hai Rui Dismissed from Office.” Could the “cultural revolution” of sixty years later possibly begin with Zhong Shanshan criticizing Jack Ma’s e-commerce platform?
Gao believes that today, under the reigning leadership, after 14 years of sustained high-pressure anti-corruption efforts that have eliminated all factions within the party and the military, the real threat may lie with those platforms that have massive capital, traffic, and social mobilization capabilities. If it was through “criticizing Peking Opera” that Pandora’s box was opened sixty years ago, could it be through “criticizing platforms” that another box will be opened sixty years later?
The phenomenon of “cannibalization” in the Chinese business sector, including excessive homogenization, vicious price competition, and surplus production capacity leading to thin profits or even losses, has been widely discussed in recent years. Authorities have expressed intentions to rectify the “cannibalistic” vicious competition. However, many observers point out that the deep-rooted issue lies in the incentive mechanisms within the existing political economic system: such as local officials excessively subsidizing investment to boost their achievements or redundant constructions in the same industry, resulting in severe oversupply of production capacities. These subsidies distort market entry barriers, while the lack of budget constraints makes it difficult for inefficient enterprises to exit. Moreover, government subsidies, guidance funds, and prioritization of state-owned enterprises disrupt market signals.
Taiwanese scholar Wu Mingze has previously highlighted that this is a structural consequence of central control over political personnel and fierce economic competition at the local level, making it challenging to completely eradicate the issue through central rectification efforts.