Chinese firms’ overseas expansion fuelled by government subsidies: OECD report
While OECD figures suggest subsidies have driven Chinese firms’ rapid growth abroad, a Chinese chamber of commerce questioned the report’s standards
The report, published on Monday by the Organisation for Economic Co-operation and Development (OECD), is based on the organisation’s Manufacturing Groups and Industrial Corporations database, which tracks subsidies received by 525 of the world’s largest manufacturing groups between 2005 and 2024 across 15 bedrock sectors.
Subsidies across the monitored sectors reached US$108 billion in 2024, the second highest since 2005, representing 1.3 per cent of the firms’ sales revenue.
On average across the period, Chinese firms received industrial subsidies – grants, income-tax concessions and below-market borrowings – that amounted to nearly 2.5 per cent of their annual revenue, per the OECD report. North American firms came in a distant second at 0.9 per cent, followed by European enterprises with a subsidy proportion below 0.5 per cent.
“In almost all regions, industrial subsidies were higher in 2024 than on average over the period covered by the database. That said, the difference between subsidies received by Chinese firms and firms elsewhere remained higher in 2024,” the report said.