Chinese companies receive far more state support - making it harder for Western businesses to compete, data suggests

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Analysis from the OECD club of nations is to date the most comprehensive attempt to quantify the types of state aid and compare different regions to each other.

Chinese manufacturers receive nine times more government support than their Western counterparts, according to calculations from the Organisation for Economic Co-operation and Development which help explain the country's complete dominance in so many sectors, from solar panels and batteries to steel. The figures produced by the OECD show that Chinese businesses benefit from government subsidies equivalent, on average, to 3.7% of their revenues. This compares to average state aid of only 0.

At its simplest, it can take the form of direct grants from governments, to support a company or help it to build a plant. However, some countries are less transparent than others about these grants. But arguably more important are special low taxes sometimes charged to specific companies or sectors, and lower-than-market interest rates which are sometimes offered to favoured firms.

 

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