Part 5/7:
The report highlights an alarming intertwining of industry and state, with over 98% of Chinese listed companies benefiting from state subsidies. This heavy-handed approach not only inflates domestic production but also leads to surplus capacity, causing waves in international markets and resulting in lower prices that undermine foreign competition.
The Rhodium Group argues that such practices have direct repercussions on supply and demand dynamics within China and on international trade, where China's manufacturing trade surplus has swelled significantly. This boon for Chinese exports has consequently cost other major economies market share.