Robotic arms coat a battery cover at a factory operated in Chongqing. (Photo/Chongqing Daily)

Chongqing - In late August, China stepped up competition oversight in the lithium battery sector, with the State Administration for Market Regulation (SAMR) releasing six representative merger review cases as part of a broader regulatory campaign.

In March, SAMR identified solar photovoltaics, lithium batteries and new energy vehicles as key sectors for regulatory action.

In April, the Ministry of Industry and Information Technology and three other government departments held a meeting with power and energy storage battery companies, calling for stronger capacity monitoring, more orderly price competition, shorter payment terms for suppliers, and tighter oversight of product quality and intellectual property rights. The meeting also discussed a list of irrational competitive practices in the industry.

Since the start of 2026, regulators have made lithium batteries and other sectors a focus of antitrust merger review and have pledged to support mergers and restructuring in accordance with the law to help industries move away from malicious competition.

For industries facing redundant investment and falling capacity utilization, mergers and restructuring can reduce repeated investment, make better use of existing capacity, and promote the integration of technology, supply chains and sales channels.

The core of the current competition regulation is to distinguish normal market competition from low-level repetitive competition, and efficiency-enhancing industry consolidation from excessive concentration that could harm market competition.

Regulators support high-quality merger projects that can revitalize idle assets and strengthen industrial and supply chains, while exploring fast-track review channels and streamlined procedures.

In one typical case, Cangzhou Mingzhu Plastic Co., Ltd. and Guangzhou Zengcheng Development Zone Eastern Center Investment Co., Ltd. formed a joint venture for a wet-process lithium-ion battery separator project. The transaction received unconditional approval in May, with regulators saying it would help optimize the industry’s competitive structure.

Review efficiency also improves. Since August 1, China has further expanded its delegated merger review program, adding Liaoning, Zhejiang and Sichuan to the pilot for reviewing certain cases. Under the previous pilot program, cases took an average of about 17.5 days to complete, generally within 20 days.

At the same time, support for industry consolidation does not mean looser antitrust scrutiny. Concentrations that could worsen destructive low-price competition or redundant investment will be subject to stricter review in accordance with the law.

Importantly, the current regulatory push is not aimed at administrative intervention in prices. Instead, antitrust review is being used to define the boundaries of competitive conduct — leaving healthy technology competition untouched while targeting destructive price competition.

As regulation tightens, there is less room for companies to rely solely on price wars and capacity expansion to gain market share. Companies with stronger technological capabilities, industrial support capacity and higher operational efficiency are more likely to gain an advantage as the industry adjusts.

In recent years, China’s lithium battery industry has faced excess capacity, longer payment cycles and frequent patent disputes, rooted in the mutually reinforcing effects of low-level repetitive investment and price wars. The latest regulatory measures are intended to correct these distortions in the competitive environment.

The policy shift also deserves attention from global markets. According to the International Energy Agency, China accounted for more than 80% of global battery cell production in 2025 and is also a major global production base for battery materials. Changes in competition rules for China’s lithium battery industry therefore affect not only domestic industrial development, but could also have an impact on global electric vehicle and energy storage supply chains.