CF40 Study of 5,300 Firms Rebuts OECD Subsidy Claim, Says China New Economy Runs on Equity
Updated
Updated · Pekingnology · Jun 13
CF40 Study of 5,300 Firms Rebuts OECD Subsidy Claim, Says China New Economy Runs on Equity
1 articles · Updated · Pekingnology · Jun 13
Summary
More than 5,300 non-financial A-share companies analyzed over 2018-2025 led CF40 researchers Zhu He and Guo Kai to conclude China’s emerging industries rely mainly on internal cash flow, profitability and equity financing, not cheap credit.
The study says new-economy firms carry less and shorter-maturity debt than old-economy peers, while debt growth was concentrated in construction, utilities and transport rather than sectors such as EVs, solar and semiconductors.
2.0 trillion yuan of equity raised by new-economy light-asset firms in 2019-2025 versus 640.2 billion yuan of new debt illustrates that external financing was mostly equity-led; old-economy groups relied more heavily on borrowing.
Government subsidies peaked at 227.2 billion yuan in 2022 and fell to 175.8 billion yuan in 2025, with roughly two-thirds going to the old economy; CF40 says subsidy dependence in new-economy firms has dropped sharply as profits expanded.
The report directly challenges the OECD’s June 1 subsidy database, arguing its 525-firm global sample and loan-rate methodology overstate Chinese support and could be misused to justify tariffs or other restrictions.
Is China's new economy a market-driven giant or a subsidy-fueled bubble on the verge of popping?
Is the global trade system fundamentally broken when facing China’s state-capitalist economic model?
Measuring China’s Industrial Subsidies: OECD’s 2026 Report, CF40’s Rebuttal, and the Future of Global Trade
Overview
The OECD's 2026 report on industrial subsidies sparked a major debate by claiming that Chinese firms receive much larger subsidies than those in other countries, especially in key sectors like solar power, semiconductors, and wind energy. This led to concerns about market distortion and calls for more transparency and limits on such support. In response, China expressed willingness to discuss fair competition and subsidy restrictions. The clash between the OECD’s data-driven approach and China’s rebuttal highlights the challenges in measuring and defining subsidies, fueling ongoing global trade tensions and shaping future policy discussions.