Global subsidies rebound, especially in China, OECD says

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)

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