China's government, led by President Xi Jinping, is taking steps to address ongoing deflation and intense price wars that have affected much of the country's economy, particularly the solar industry. Despite efforts since late 2024 to reduce output and establish price floors, China's solar sector continues to face overcapacity and fierce competition, resulting in sustained losses. The Chinese Communist Party's official publication Qiushi criticized the so-called "involutionary" price wars, describing them as a cycle of low prices, low quality, and unprofitable rivalry that damages market boundaries and bottom lines. In response, the country's largest polysilicon producers are reportedly planning to form a company aimed at acquiring struggling competitors to reduce the supply glut and end the damaging price competition. These measures indicate a more active government intervention to stabilize prices and support industry health amid broader economic concerns about deflation.