Jianggan Li: China Price War Chaos, EV Subsidy Battles & Why Firms Flee Abroad – E622

" But you see the situation with actual wars, right? Once somebody starts, they expect a quick assault to win the war and take the enemy's territory. But typically, it ends up in a war of attrition, where everybody spends a lot of money and resources with very little result. When that happens, you need to find an excuse for everybody to de-escalate because promises were made to stakeholders that there was a reason to launch this, and admitting defeat would be a humiliation for many. Especially since many of these companies are still founder-driven, a defeat could mean losing credibility as a founder. If you look at the messages from every platform, each one says they are committed to defending market share and that competitors are irrational. But if everybody says the competitors are irrational, then I don’t know. " - Jianggan Li, Founder & CEO of Momentum Works

"In July, Alibaba committed to invest 50 billion yuan into subsidies over one year. Alibaba owned the second-ranked food delivery platform Ele.me, which historically held 25 to 30 percent market share. This time, they used their biggest weapon, Taobao, the daily shopping app with 400 million active users even before the war. They created an entry point on Taobao where customers could instantly buy food, bubble tea, gadgets, and more, all delivered within 30 minutes. That move triggered the war, and it has been bloody." - Jianggan Li, Founder & CEO of Momentum Works

"Talent migration has always been happening. Internal migration is not as restrictive as it was 20 years ago. The Hukou system still exists, but there are many ways to get around it, and in cities like Hangzhou it is much easier to obtain a local Hukou. With the housing price issue, governments are more incentivized to grant registrations to migrants so they can take up housing. Many factors are driving this migration." - Jianggan Li, Founder & CEO of Momentum Works

Jeremy Au and Jianggan explore why China business environment is locked in cycles of over-competition that destroy margins and push firms to seek growth abroad. They trace how JD, Meituan, and Alibaba’s food delivery war escalated into billions of yuan in subsidies, why regulators hesitate to intervene, and how clusters like Shenzhen and Hangzhou still thrive despite intense rivalry. Their discussion highlights collapsing product margins, subsidy-driven chaos in the EV sector, and the role of provincial governments in fueling excessive competition. They also examine how talent migration and generational shifts are reshaping workforce dynamics, with younger Chinese workers increasingly prioritizing lifestyle and aspirations over hardship-heavy careers.