The writer is chief Asia economist at Morgan Stanley

A familiarity with buzzwords is essential to keep track of what is going on in China. If you have been a China watcher over the past few years, you will be familiar with “supply-side reforms”, the “three red lines” and the mantra “housing is for living, not for speculation”.

Recently, a new buzzword has emerged — “anti-involution”. In China, involution describes a dynamic where aggressive competition among producers results in excess capacity, drastic price cuts and diminishing returns on capital employed. Anti-involution is a response to the persistent challenges of deflation. In recent years, Chinese policymakers have pursued supply-side measures such as production controls in upstream sectors such as steel and cement.