Key Takeaways
- A 2026 OECD study argues that China's rising industrial subsidies explain much of its global market share gains, but the study's flawed methodology, particularly in measuring interest rate subsidies, may overstate the scale of government support.
- In contrast, a 2025 IMF study finds that China's industrial subsidies have remained broadly stable as a share of GDP, challenging the OECD's conclusion that subsidies are increasing.
- Because of their flaws, these studies do not provide useful guidance for policymakers trying to judge the magnitude of Chinese industrial subsidies.
- Future studies on subsidies should improve their methodology, including by fully disclosing the data on which they base their estimates and by explaining why their estimates differ from prior studies.
Body
The differing findings of the OECD and IMF studies highlight the challenges of accurately measuring Chinese industrial subsidies, making the estimates unreliable for shaping trade policy. Policymakers should avoid using disputed figures to justify protectionism. Greater data transparency and clearer explanations for discrepancies between estimates are essential to help policymakers formulate effective trade policies.
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