Breaking news! Three provinces and one municipality have enacted laws, firing the first shot in the fight against involution.
On August 1st, 2025, the standing committees of the people's congresses of Shanghai, Jiangsu, Zhejiang, and Anhui simultaneously released the "Decision on Promoting the Collaborative Development of Scientific and Technological Innovation in the Yangtze River Delta", which will officially come into effect on September 1st. This is the first time in the history of the Yangtze River Delta that "collaborative legislation" has been used to promote regional scientific and technological innovation. The content covers 19 articles, including joint research on basic research, joint establishment of achievement transformation mechanisms, mutual recognition of professional titles and qualifications, and joint construction of industrial parks. The intention is to break through the institutional breakpoints between the innovation chain and the industrial chain, and to curb repeated investment, internal resource consumption, and policy arbitrage.
Just two days ago, the Political Bureau meeting proposed to "regulate the disorderly competition of enterprises in accordance with laws and regulations" and specifically mentioned "standardizing local investment promotion behaviors". At the same time, it emphasized the need to accelerate the construction of a unified national market and promote the efficient allocation and fair competition of resource elements in a larger scope. The National Development and Reform Commission stated directly at a press conference the next day that it is necessary to "resolutely stop blind following, rushing into action all at once". Behind these high - frequency signals, the state is starting to use the system to correct the interference of the "local competition logic" on the innovation ecosystem, and it is also laying the foundation for breaking administrative barriers and building a unified and open market environment.
For venture capital, this not only means the re - allocation of innovation resources, but also indicates the end of an era: the involution path characterized by subsidies, talent poaching, and inflated valuations is being ended by the law. With the implementation of the new regulations, investment needs to re - examine the strategic layout, shift to a benign competition driven by core technology breakthroughs and industrial chain collaboration, gradually abandon short - sighted behaviors, and welcome the arrival of an era of high - quality innovation.
How Did Involution Become a Chronic Problem?
To be honest, in the original development pattern, the relationship between cities was mainly competition rather than cooperation. The Yangtze River Delta has long been regarded as the "frontier position" of China's scientific and technological innovation. From national laboratories and high - level parks to unicorn enterprises and venture capital institutions, this region has gathered the most concentrated innovation resources in China. However, precisely because of this, in the past few years, it has become the main battlefield of "technological involution" - an unbalanced system jointly shaped by local governments, enterprises, and capital.
Taking popular sectors such as chips, AI, and intelligent manufacturing as examples, the same technology team can receive invitations to settle in Suzhou, Jiaxing, and Wuhu within half a month. Local platforms offer subsidies, invest in funds, and provide office buildings. Some are even willing to participate in the project with a high valuation. The more open the policies are, the more willing the projects are to "negotiate with multiple parties and settle in multiple places". Eventually, a pattern of arbitrage in multiple places emerged, such as "the headquarters in Zhangjiang, the pilot test in Hefei, and the registration in Wujiang".
The most intuitive manifestation of this involution is the embarrassing industrial isomorphism. When looking at the industrial map, a picture of "great minds think alike" comes into view. Among the 16 core cities in the Yangtze River Delta, 12 once regarded the electronic information industry as the top priority, 11 targeted the automobile industry at the same time, and 8 planned the petrochemical industry. This highly overlapping industrial planning is not accidental.
Behind this is the practical consideration of local governments acting independently and for their own interests. Under the previous evaluation system mainly based on GDP and tax revenue, local governments, as agents of local interests, have a strong motivation to attract and cultivate local star industries by creating "policy depressions" and providing financial subsidies. This has led to the over - segmentation and fierce competition for limited capital, talent, and market resources within the region.
From the perspective of capital, this model is also distorting the market. Many venture capital institutions know that the project valuations are inflated, but seeing that local funds or state - owned mother funds provide a safety net, they tend to follow the investment. Because if they don't, it means missing the opportunity; once they enter the game, they can use government resources to facilitate the next round of financing. Project risks are diluted by policies, valuations are pushed up by political achievements, and the exit channels rely on local supporting measures. As a result, investment is becoming more and more resource - driven rather than technology - driven. It is understandable that state - owned capital, as the investor, requires a certain proportion of reinvestment, but GP cannot allocate funds to the most efficient places, and repeated construction is inevitable.
What is even more difficult is the structural imbalance of the industrial chain. Most of the funds for basic research flow into visible laboratory renovations and equipment purchases. Pilot test platforms are repeatedly built in many places but with extremely low utilization rates. The ability to truly connect the "R & D - pilot test - mass production" path is extremely scarce. After some enterprises obtain local subsidies, they are not in a hurry to start actual production but carry out multiple rounds of financing around "policy packages". Eventually, many projects remain at the PPT and road - show stages, resulting in a systematic misalignment among capital, technology, and policies.
A typical example is the new energy vehicle supporting projects. In the past two years, the core supporting enterprises of CATL and BYD have been competed for by many places in Jiangsu and Zhejiang. The battery structural parts project alone has been repeatedly introduced more than ten times. Local finance has spared no expense in investing hundreds of millions of yuan to build standard factories, but three years later, most of the settled projects have not been put into actual production.
All of this has ultimately backfired on the innovation ecosystem: enterprises have gradually developed a "policy dependence syndrome", venture capital has lost the ability to judge the fundamentals of projects, and local governments have changed from "supporting science and technology" to "betting on sectors". Over time, involution has changed from a market competition problem to an institutional structure problem.
The joint adoption of the "Decision on Promoting the Collaborative Development of Scientific and Technological Innovation in the Yangtze River Delta" by the four regions in the Yangtze River Delta not only means a systematic reflection on the chaotic competition but also an attempt to rebuild the rules. It tries to establish the boundary awareness of "collaboration is more important than competition" in a legal form and establish basic principles for the free flow of elements, the joint research and transformation of scientific and technological achievements, and the staggered layout of the industrial chain within the region. This is a direct response to the problem of technological involution at the institutional level and also marks that the "horse - racing mechanism" among local governments is being replaced by a more advanced coordination mechanism.
From Policy Consensus to Institutional Implementation: What Has Really Changed in Collaborative Legislation?
This is not just a common policy framework that we are familiar with, but a legal institutional arrangement involving many long - standing technical issues such as funds, achievements, platforms, parks, and even the distribution of ownership. It is another important achievement of the collaborative legislation strengthened by the people's congresses in the Yangtze River Delta region after the revision of the "Legislation Law of the People's Republic of China".
The "Decision on Promoting the Collaborative Development of Scientific and Technological Innovation in the Yangtze River Delta" is not the result of one - day effort. It is an inevitable product of the continuous evolution of the Yangtze River Delta integration policy framework from quantitative change to qualitative change. Behind it is a clear policy trajectory led by the national top - level design and jointly promoted by ministries and provinces (cities).
In 2019, the Communist Party of China Central Committee and the State Council issued the "Outline of the Yangtze River Delta Regional Integration Development Plan", officially upgrading the integration development of the Yangtze River Delta to a national strategy and clearly proposing to "jointly build a Yangtze River Delta scientific and technological innovation community". In 2020, the Ministry of Science and Technology jointly issued the "Development Plan for the Construction of the Yangtze River Delta Scientific and Technological Innovation Community" with the three provinces and one municipality, further clarifying the collaborative path led by "science and technology innovation + industry" and establishing a "4 + 1" collaborative work model. Subsequently, the "Action Plan for the Three Provinces and One Municipality to Jointly Build the Yangtze River Delta Scientific and Technological Innovation Community (2022 - 2025)" was issued, transforming the macro - plan into a specific action route. In 2022, the Ministry of Science and Technology and the governments of the three provinces and one municipality jointly issued the "Collaborative Research and Development Cooperation Mechanism for the Yangtze River Delta Scientific and Technological Innovation Community", focusing on key core technologies and establishing a cross - regional "call for bids" cooperation model.
Different from previous guiding policies, this decision no longer emphasizes "integration in the general direction" but directly makes operational arrangements on how to jointly build a joint fund, how to establish R & D platforms across regions, and how to form an integrated achievement transformation mechanism. For example, it clearly proposes to establish a joint fund for basic research in the Yangtze River Delta and encourages the joint establishment of basic research projects across provinces, disciplines, and with an industrial orientation. Another example is that the science and technology department takes the lead in building an integrated achievement transformation system, changing the previous situation where each region approves and recognizes independently and the interests are scattered. This coordination mechanism is not a loose cooperation but a institutional network with a closed - loop of responsibilities under the guarantee of legislation.
In the "Decision" passed this time, the word "collaboration" appears frequently, which is a step further than the previous integration centered on "joint construction". For example, regarding the adjustment of park policies, the 10th Mayors' Joint Meeting of the Yangtze River Delta Urban Economic Coordination Committee in 2010 determined the topic of joint construction and cooperation of parks in the Yangtze River Delta and determined the development idea of coordinating the joint construction and cooperation between development zones at the Yangtze River Delta level. This decision encourages cross - provincial cooperation and coordinated development between development zones and parks, aiming at the long - standing involution pattern in aspects such as investment promotion policies, talent settlement, and land quotas. There is more joint construction but less win - win results. It is difficult to establish a benefit - sharing mechanism for the joint construction of parks with development zones as the main body. After all, cross - park industrial joint construction does not bring about benefit sharing, resulting in insufficient motivation for development entities. From the language of the provisions, the Yangtze River Delta parks are trying to shift from "joint construction without win - win results" to "collaborative development", which is an innovation in the resource combination mode for many enterprises and also a fundamental change in the local investment promotion incentive mechanism.
The truly concrete part of the "Decision" is that it tries to build a set of collaborative mechanisms covering the whole process of innovation for the Yangtze River Delta. At the uppermost reaches is the joint expansion of scientific research capabilities. The document proposes to jointly cultivate the national strategic scientific and technological strength, which is not a baseless assumption. At present, Shanghai and Hefei have cooperated to promote the fourth - generation "Hefei Advanced Light Source", and the joint layout of national laboratories has also begun. Eight national key laboratories jointly built by institutions such as the Shanghai Institute of Microsystem and Information Technology of the Chinese Academy of Sciences and Nanjing University are the initial manifestation of this regional scientific research system.
At the basic research level, the "Decision" mentions the establishment of the "Yangtze River Delta Joint Fund for Basic Research" to provide a source of funds for research projects across provinces, disciplines, and with a clear industrial orientation. This arrangement aims to promote "bundled" collaboration among scientific research institutions and avoid the previous situation of acting independently and repeated investment.
In the achievement transformation link, Zhejiang's previous "use first, transfer later" mechanism has become a model. This model allows enterprises to try out the on - the - job scientific and technological achievements of universities and research institutions before formally signing the technology transfer agreement. Pay if it succeeds, and there is no loss if it fails. Since its launch in 2021, more than 8,000 achievements have been included in the pool, and the cumulative number of trial - uses has exceeded 2,500 times. The "Decision" writes this operation mode into the provisions, which is equivalent to providing legal support for local exploration and promoting it across the Yangtze River Delta.
In the part of resource sharing, the "Decision" clearly states that it is necessary to promote a unified technology transfer system. The existing "Yangtze River Delta Scientific and Technological Resource Sharing Service Platform" has currently integrated nearly 50,000 large - scale scientific research instruments, with a total equipment value of more than 59 billion yuan. The platform covers the main scientific research institutions and some technology enterprises in Jiangsu, Zhejiang, Shanghai, and Anhui, and the use process and subsidy mechanism have been basically straightened out. Whether a cross - provincial network can be realized in the future depends on whether Anhui can complete the connection within 2025.
In addition, the "Decision" proposes to support the construction of "science and technology innovation enclave parks" and "pilot test platforms" to solve the problem of technology moving from the laboratory to the workshop. Whether such engineering projects can be promoted depends more on funds and the implementation ability of local governments. However, in the current pilot test cooperation between Hefei and Zhangjiang, several enclave projects in the fields of integrated circuits and high - end equipment are in operation, indicating that this path is not in vain.
After Collaborative Legislation: The Prospect Is Promising, but Institutional "Hard Nuts" Still Need to Be Cracked
The direct benefit of collaborative legislation is to provide institutional guarantee for the flow and sharing of cross - regional innovation elements. After the release of the "Decision", the G60 Science and Technology Innovation Corridor in the Yangtze River Delta has launched a pilot of the "exchangeable" mechanism for innovation vouchers, realizing "enterprises apply where they are, use where they are, and the local finance settles the accounts". According to public reports, the first batch of pilot cities include Songjiang, Jiashan, Xuancheng, Wuhu, etc., covering multiple scenarios from R & D to pilot test. In the future, it is expected to be extended to basic research funding and coordinated procurement of the upstream and downstream of the industrial chain.
More structurally significant is that the division of labor and cooperation in the industrial chain is shifting from the administrative region logic to the functional region logic. In the field of new energy vehicles, 4 out of every 10 new energy vehicles produced in the country come from the Yangtze River Delta. The Yangtze River Delta has initially formed a division of labor pattern of "Shanghai provides R & D design and core components, Jiangsu provides power batteries, Zhejiang provides intelligent solutions, and Anhui provides supporting production". The "Decision" puts forward the requirements of "jointly building a large - scale platform, jointly investing in industrial funds, and jointly cultivating the industrial ecosystem" for these industries with a collaborative foundation, which is expected to promote the formation of a regional industrial community.
The unification of the system also provides clearer behavioral boundaries for local governments. The "Decision" clearly proposes to prevent "disorderly competition" and explore a sharing mechanism for fiscal revenue, land policies, and achievement transformation benefits. In policy documents, "tax sharing" is repeatedly mentioned. For example, in the agreement on the "Advanced Manufacturing Collaborative Zone" signed by Jiangsu Province and Jiading District of Shanghai in 2024, an attempt was made to distribute the value - added tax and income tax of cross - regional projects in proportion, providing a precedent for the exploration of a larger - scale tax - sharing mechanism.
What is even more worth looking forward to is that the collaborative legislation in the Yangtze River Delta has been clearly regarded as an important sample for the reform of regional governance in the country. In the Political Bureau meeting of the Communist Party of China Central Committee held in July 2025, "regulating the disorderly competition of enterprises in accordance with laws and regulations and standardizing local investment promotion behaviors" was clearly mentioned, which highly echoes the content of the "Decision". The National Development and Reform Commission, the Ministry of Justice, etc. are also promoting regions such as Beijing - Tianjin - Hebei, Chengdu - Chongqing, and Guangdong - Hong Kong - Macao Greater Bay Area to learn from the "collaborative legislation + unified law enforcement + element exchange" model in the Yangtze River Delta and regard the Yangtze River Delta as a demonstration area for the "unified national market".
Of course, challenges still exist, especially in the aspects of cross - regional dispute resolution and fiscal revenue sharing. At present, it still mainly relies on joint meetings and vertical - horizontal coordination, and a institutionalized and judicialized permanent mechanism has not been formed. However, from the actual progress, the Yangtze River Delta is seeking the greatest common divisor of institutional enclosure under the local decentralization system through the path of "small - scale pilot + standard output + legal solidification". This exploration is not only an innovative practice of local collaborative governance but also a pre - institutional experiment for the construction of a unified national market in the new stage of the central - local relationship.
Conclusion: The Scale of the System Determines the Space for Innovation
The implementation of collaborative legislation in the Yangtze River Delta determines whether the internal competition boundary of the region can be moved from the administrative line to behind the institutional line. This is not only a systematic countermeasure against disorderly involution but also a signal to encourage long - termism. Enterprises that are not built by subsidies need a market environment that does not encourage "seizing territory".
This is just the beginning of writing the "consensus" into the "common law". What really determines the innovation vitality is still the scale of the system and whether the boundaries of policy implementation are clear. Whether a regional innovation cooperation mechanism that does not rely on subsidies, talent poaching, or qualification arbitrage can be established within