PARIS, June 1 (Reuters) – Government subsidies to industry have reached their highest level since the global financial crisis, driven largely by China, a report from the Organisation for Economic Cooperation and Development said on Monday. • The OECD’s Manufacturing Groups and Industrial Corporations database, known by the acronym MAGIC, tracks what firms receive as […]
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Global subsidies rebound, especially in China, OECD says
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PARIS, June 1 (Reuters) – Government subsidies to industry have reached their highest level since the global financial crisis, driven largely by China, a report from the Organisation for Economic Cooperation and Development said on Monday.
• The OECD’s Manufacturing Groups and Industrial Corporations database, known by the acronym MAGIC, tracks what firms receive as opposed to what governments say they give
• This provides an insight into opaque subsidy systems, particularly in China
• Subsidies for 15 industries covered by the OECD’s database reached $108 billion in 2024, only slightly below a peak in 2023
• As a percentage of firms’ revenue, the amount in both years was the highest since western governments provided various forms of state support in 2009 at the height of the financial crisis
• The sectors subsidised the most over 2005 to 2024 were solar panels, semiconductors, aluminium, steel and shipbuilding
• The OECD said at a conservative estimate Chinese firms received on average three to eight times more government support than firms based in the OECD between 2005 and 2024
• OECD Secretary-General Mathias Cormann told a press conference that of firms that gained market share between 2005 and 2024, subsidies explained around 22% of the gains
• That rises to nearly 60% for Chinese firms
• Subsidies have not led to meaningful gains in productivity or profitability, he said
• Officials meeting at an OECD ministerial gathering on Wednesday and Thursday will discuss ways to make global trade fairer
(Reporting by Leigh Thomas; editing by Barbara Lewis)