Over the past five years, the global economic narrative has undergone profound transformation, marked by a succession of themes that reshaped market behaviour, sentiment, and policy responses. In early 2020, the Covid19 pandemic emerged as a defining rupture in the post-war economic order. What began as a public-health crisis swiftly evolved into a systemic economic shock, paralysing supply chains, freezing labour mobility, and collapsing demand across key commodities. For the maritime sector, it was not merely a statistical anomaly but a lived disruption. The world economy appeared suspended, with factories shuttered, flights grounded, and industrial output plunging to a pace not witnessed since the Great Depression. The collapse in demand for energy, steelmaking inputs, and manufacturing goods marked the beginning of a period where volatility became a permanent fixture of market sentiment. As lockdowns gradually eased, economies reopened with a surge of pent-up appetite that catalysed the next major turning point in the global narrative. Consumers re-entered markets with extraordinary intensity, seeking goods, travel, and experiences. This demand revival frequently exceeded the capacity of supply chains still reeling from earlier disruptions. Retailers scrambled to rebuild inventories, Asian factories resumed operations at accelerated rates, and major export hubs faced unprecedented congestion. The feverish pace of global trade created distortions across containerised and bulk shipping, pushing logistics systems into unfamiliar territory. Yet this rapid rebound carried a hidden cost: the early seeds of global inflation. What began as a transitory mismatch between strong consumption and constrained production soon matured into a systemic price surge. Energy markets tightened, agricultural inputs became volatile, and industrial commodities moved sharply higher. Inflation seeped into every layer of production, escalating from temporary friction into a macroeconomic challenge that demanded forceful intervention. Central banks responded with the most aggressive tightening cycle in decades, lifting policy rates to combat persistent inflationary pressures. The shift in monetary stance reshaped investment flows, constrained spending, and temporarily recalibrated global trade volumes, particularly in trade-sensitive and capital-dependent sectors. As inflation gradually began to ease and the tightening cycle approached its peak, another central motif asserted itself more prominently: the intensifying geopolitical rivalry between major economies. What initially appeared as a series of tariff skirmishes evolved into a structural trade confrontation, with supply chains increasingly viewed through the lens of national security rather than efficiency. A striking metaphor soon gained currency in market commentaries: “changing the engine while the plane is in the air,” capturing the reality of businesses forced to redesign production networks amid escalating political uncertainty. This geopolitical realignment reshaped commodity flows, influenced investment decisions, and injected a new, less predictable layer of risk into a market environment already contending with cyclical headwinds.
Looking toward the coming year, identifying a single unifying theme is increasingly complex, yet the concept of “anti-involution” stands out as a compelling candidate. It reflects a growing recognition in China – the world’s second-largest economy and the anchor of many commodity markets – that the old model of competing through scale, speed, and cost compression has reached its structural limits. Following mounting pressures from international trading partners and persistent domestic deflation, Beijing has elevated antiinvolution to a national economic strategy, aiming to shift from a volumedriven industrial model to one centred on quality, pricing power, and longterm resilience.
“Involution,” (“neijuan” in Chinese) a term with origins in anthropology, has taken on a distinctly economic and sociological meaning in China’s contemporary discourse. It describes a self-perpetuating cycle of hypercompetition in which firms expand capacity, cut prices, and intensify output simply to maintain their position, without achieving corresponding gains in productivity or profitability. In essence, it is the paradox of doing more while progressing nowhere – a treadmill of escalating effort that yields diminishing returns. In modern societal usage, involution captures the sense of individuals or industries becoming trapped in exhausting, upward-spiralling competition that does not translate into real advancement or improved rewards. More broadly, it refers to systems that grow increasingly complex and inwardfolding, adding layers of activity and pressure without generating meaningful development. It is a powerful descriptor of stagnation masked by motion, and it has become a central metaphor for the industrial malaise China now seeks to confront.
The anti-involution campaign seeks to halt precisely this cycle. By imposing stricter standards, regulating capacity expansion, and curbing aggressive pricing tactics, the government aims to restore profitability and discipline across industries. This initiative coincides with a broader effort to combat deflationary pressures that have weighed heavily on producer margins and household confidence. Beijing’s policy emphasis has centred on the so-called “New Three” industries – solar technology, lithium batteries, and electric vehicles – sectors critical to the global energy transition and central to China’s industrial competitiveness. Yet the scope of anti-involution extends beyond these flagship sectors, touching steel, cement, e-commerce, logistics, and services, all of which have faced severe price competition in recent years. The intention is to create an environment where firms compete not by racing to the bottom, but by climbing upward through innovation, quality, and technological advancement. The anti-involution campaign seeks to halt precisely this cycle. By imposing stricter standards, regulating capacity expansion, and curbing aggressive pricing tactics, the government aims to restore profitability and discipline across industries. This initiative coincides with a broader effort to combat deflationary pressures that have weighed heavily on producer margins and household confidence. Beijing’s policy emphasis has centred on the so-called “New Three” industries – solar technology, lithium batteries, and electric vehicles – sectors critical to the global energy transition and central to China’s industrial competitiveness. Yet the scope of anti-involution extends beyond these flagship sectors, touching steel, cement, e-commerce, logistics, and services, all of which have faced severe price competition in recent years. The intention is to create an environment where firms compete not by racing to the bottom, but by climbing upward through innovation, quality, and technological advancement.
China’s trade surplus underscores the complexity of this transition. In the first eleven months of the year, exports rose to USD 3.4 trillion while imports edged slightly lower to USD 2.3 trillion, resulting in a record surplus of roughly USD 1 trillion – a figure unprecedented in economic history. This surplus is not an accident but the product of decades of industrial-policy alignment that propelled China from a low-income agrarian base in the 1970s to a global industrial powerhouse. The country’s ascent up the manufacturing ladder – from low-cost textiles in the 1980s to high-value electronics and green technologies in the current decade. The electronics sector alone accounted for more than USD 1 trillion in exports in 2024, illustrating the depth of China’s embedded role in global production networks.
Yet the anti-involution campaign may signal a subtle but significant pivot. By attempting to curb low-quality competition and discourage blind capacity expansion, China could be aiming to gradually shift from an export-led model focused on cost advantages to one centred on innovation, value addition, and strategic self-sufficiency. If these measures gain traction, the implications for global markets might be far-reaching. Price erosion in commodities such as lithium, solar modules, and battery components could slow should Beijing succeed in reining in excess supply. At the same time, new competitive spaces may emerge for producers outside China if the country reduces its presence in the lowest-margin segments of global manufacturing. For investors, such a transition is expected to challenge the era of hyper-growth unsupported by profitability. China’s strategy is not necessarily a defensive manoeuvre; it might instead represent a calculated evolution toward positioning itself for a global economy increasingly shaped by the energy transition, technological rivalry, and supply-chain resilience.
For the dry bulk sector, China’s potential shift toward anti-involution could adversely affect the market in the short term, as tighter controls on excess capacity and a more disciplined industrial approach may temper steel output and soften demand for key inputs. This could translate into more uneven import patterns and heightened near-term volatility. However, over the longer term, a transition toward higher-quality growth and more efficient resource allocation might create a steadier foundation for bulk demand. As China refines its industrial model, trade flows could gradually stabilise, offering a more balanced and sustainable backdrop for the dry bulk market.
Data source: Doric