OECD Study: China's Subsidies Exceed the West by a Factor of Eight

The OECD has documented a striking disparity in state industrial support. Handelsblatt reports that Chinese industrial corporations receive three to eight times higher subsidies in important sectors than companies in the 38 OECD states. Support is provided through direct government grants, tax benefits, and subsidized loans.

The sectors most affected are steel, automotive, semiconductors, and solar panels – industries in which China has massively expanded its global market position. Tagesschau reports that around 60 percent of China's market share gains can be explained by this subsidy policy. This suggests that Beijing is deliberately creating competitive advantages through state support rather than relying on innovation.

Global Subsidy Spiral Intensifies

The OECD simultaneously warns of a global trend: not only China is increasing industrial support. Wiwo reports that in other countries too, the scope of state support for businesses has risen significantly – the highest level since the 2009 financial crisis. This intensifies international competition and could lead to a subsidy spiral in which countries mutually ramp up their industries.

The study underscores a central trade problem of our time: while Western countries liberalize their markets and rely on competition, China uses state resources to dominate strategic industries. This threatens not only European and American companies but also undermines the rules of the international trading system. The OECD data thus provides ammunition for the growing debate over trade tariffs and protectionist measures against Chinese products.