OECD Says Subsidies Drove 60% of Chinese Firms' Share Gains, Distorting Global Markets
Updated
Updated · Financial Times · Jun 1
OECD Says Subsidies Drove 60% of Chinese Firms' Share Gains, Distorting Global Markets
5 articles · Updated · Financial Times · Jun 1
Nearly 60% of Chinese firms’ global market-share gains since 2005 were driven by subsidies, the OECD said, arguing state support and cheap loans helped them expand in autos, shipbuilding, solar and other sectors.
Chinese companies received three to eight times more government support on average in 2024 than firms in the 38 OECD countries, while China accounted for 52% of the £108 billion in global subsidies.
Solar shows the scale of the shift: Chinese firms’ global share jumped from 14% to 87%, and OECD researchers said subsidies boosted share without improving productivity or profitability.
soft loans were a key channel, with even poorly rated Chinese companies borrowing from state banks at rates below those available to highly creditworthy US and European rivals; the OECD also flagged weaker disclosure by Chinese corporates.
The findings are likely to intensify EU and US pressure for tariffs and quotas as Beijing denies unfair subsidisation and vows retaliation against foreign trade defenses.
Is China's 'industrial policy of everything' a push for economic growth or a grand strategy for global geopolitical dominance?
Can the global free-trade system, designed for market economies, survive the rise of China's state-driven economic model?
As China's subsidized exports surge, can Western nations respond without sparking a costly global subsidy war and protectionism?
OECD Report: China’s Massive Subsidies Create Unprecedented Global Market Imbalances
Overview
The OECD has issued a critical warning about the unprecedented scale of China’s industrial subsidies, highlighting how these extensive financial supports are fundamentally altering the global competitive landscape. According to a new OECD report and its MAGIC Database, Chinese firms receive up to eight times more subsidies than those in OECD countries, creating significant market imbalances. These subsidies, now at their highest levels since the 2008 financial crisis across 15 key sectors, are shaping international trade flows and giving Chinese industries a major advantage, resulting in an uneven playing field for global competitors.