OECD: The success of Chinese car manufacturers [in Europe] is the result of financial doping. A river of money

The Organization for Economic Co-operation and Development (OECD) reviewed the financial reports of large companies to determine the extent to which they are subsidized by local governments. It turns out that Chinese automakers have recently been flooded with funds, receiving more than companies in other regions combined. Various forms of subsidies surged after the pandemic, which was clearly seen as an opportunity to shift the global balance of power.

Chinese taxpayers contribute to the success of their companies. They know it will pay off for them.

The OECD studied 525 large companies operating in the global market. Their activities were examined between 2005 and 2024. Fifteen different industries were reviewed, including metallurgy, photovoltaics, semiconductors, and the automotive industry. Although the automotive sector had been considered strategic for years, funding was cut back at the end of the first decade of the 21st century. Support only increased after the Covid19 pandemic in 2020. By the end of 2019, Chinese manufacturers received a total equivalent to $5.12 billion, while over the next five years it rose to $11.39 billion.

In Europe, during the same periods, these figures were $1.95 billion and $3.06 billion respectively, while in North America they were $1.2 billion and $4.38 billion:

The OECD emphasizes that the figures were set conservatively and based solely on available data. All forms of subsidies, loans with interest rates below market levels provided by government agencies, and direct cash grants were considered “financing.” The flow of money into China’s industrial sector was so substantial that the organization compared it to doping in sports. It was found that as much as 60 percent of the growth (i.e., success) of Chinese companies [in all industries] worldwide is due to financial support, compared to an average global figure of 22 percent.

Government support did not help Chinese companies improve production efficiency or profitability; it was merely a financial injection for expansion. In this situation, those most affected will be competitors who do not receive similar support. But subsidies also create problems at the source by leading to excessive growth in production capacity.

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