Chinese companies get 8x more subsidies than Indian counterparts

Chinese companies get 8x more subsidies than Indian counterparts

A recent report by the Organisation for Economic Co-operation and Development (OECD) has revealed that Chinese companies received significantly more government support than their Indian counterparts between 2005 and 2024.

The data was sourced from the OECD MAGIC Database of Industrial Subsidies, which tracks actual subsidies received by firms, not just those disclosed by governments.

It covers 525 of the world's largest manufacturers across 15 key sectors over nearly two decades.

Disparity in subsidies a factor in manufacturing competitiveness

The OECD report found that between 2005 and 2024, Chinese firms received an average of three to eight times more government support than those based in the OECD.

This is a conservative estimate, and these subsidies were also much higher than what non-OECD economies like Brazil, India, and Indonesia received.

The disparity in subsidies is one of the key factors contributing to China's manufacturing competitiveness.

Subsidies and global market share gains

The OECD report also noted that around 22% of the global market share gains of firms that grew between 2005 and 2023 can be attributed to subsidies.

For Chinese firms, this number was even higher at nearly 60%.

The data highlights how government support through subsidies has played a major role in helping these companies gain a larger share of the global market.

Erosion of trust in global markets

The report further highlighted a worrying trend in the World Trade Organization (WTO).

The number of members not notifying subsidies has increased from 26 in 1995 to 117 by 2025, a jump from 23% to a staggering 70%.

This increase is seen as an erosion of trust in global markets and transparency among WTO member nations.