Huge State Subsidies Give China Unfair Edge over Foreign Rivals: OECD
The OECD said Chinese firms received 3 to 8 times more support than Western rivals, with subsidies reaching nearly 10% of revenue in semiconductors.
- On Monday, the Organisation for Economic Co-operation and Development reported that Chinese companies received between three and eight times more subsidies than Western firms between 2005 and 2024.
- This support stems from China's financial system, where state banks and policy banks issue corporate loans at rates close to the country's one-year lending benchmark, the report said.
- The OECD found that 15 sectors received $108 billion in 2024 alone, with subsidies explaining almost 60 percent of Chinese firms' global market share gains, the organization said.
- OECD Secretary-General Mathias Cormann compared these subsidies to "doping in sports," while the European Commission concluded last week that "the current state of the trade and investment relationship is not sustainable."
- Worldwide state support reached 1.3 percent of company revenue in 2024, the highest level since the 2008 financial crisis, indicating that the recent increase in industrial subsidies is structural rather than recession-driven.
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In a report published on Monday, 1 June, the OECD revealed that China subsidizes its companies "three to eight times" more than in countries based in the organisation which includes several developed countries. The steel or semiconductor sectors are concerned.
The global subsidies for industry are increasing, and China is the first in the race. The OECD sees risks for the market in this.
OECD Links 60 Percent of Chinese Firms’ Market Gains to State Support
The Organisation for Economic Co-operation and Development (OECD) has found that state subsidies helped drive nearly 60 percent of Chinese firms’ gains in global market share. The OECD report, released on June 1, said that, compared with other firms based in OECD countries, Chinese firms received an average of three to eight times more government assistance between 2005 and 2024. Using firm-level data from its Manufacturing Groups and Industrial…
US firms still dominate chip subsidies
A report from the Organization for Economic Co-operation and Development (OECD) has found that semiconductor firms based in the United States received more government support than those based in any other region. However, support for China's chip industry was larger relative to the revenue generated by Chinese semiconductor firms, reaching close to 10 percent of sales in the early 2020s. The OECD - a forum for members espousing the market econom…
Between 2005 and 2024, China's companies received an average of three to eight times more subsidies compared to their competitors in OECD countries.
In OECD countries, government subsidies in sectors such as steel, cars, semiconductors or solar power plants are not as high as they have been for a long time. China's industry is much more supported than its competitors.
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