It is not just the Trump Tariffs The concept of "involution" in China—where intense competition leads to diminishing returns without meaningful progress—ties closely to a deflationary spiral. It’s a vicious cycle: overcapacity, weak domestic demand, and cutthroat price wars drive prices down, eroding profits, discouraging investment, and further dampening consumption. This isn’t just a recent phenomenon; China’s economic challenges have been brewing for nearly a decade, predating the tariff wars often scapegoated for the downturn. Involution and Deflationary Spiral Involution, or nei juan, reflects a structural issue where resources are poured into hyper-competitive sectors—like solar panels, electric vehicles, or real...