China’s industrial subsidies to listed companies reached a record high of RMB 213.6 billion in 2020, a 14% increase over the previous year. Subsidies to semiconductor and munitions companies show a significant increase, responding to a clear movement toward a longstanding confrontation with the United States. The international debate around a level playing field may be on the rise.
The Nihon Keizai Shimbun reported today from Shanghai that China’s industrial subsidies to listed companies are at a record high. According to the report, the international debate over a level playing field is likely to rise.
According to the report, the statistics were based on the financial reports of listed companies collected by Wind, an information company. On the semiconductor side, although the number of listed companies is limited, China’s total subsidies to 113 related companies amounted to 10.6 billion yuan, rapidly increasing to 12 times that of 10 years ago. Semiconductor foundry Semiconductor Manufacturing International (SMIC) not only received close to 2.5 billion yuan in subsidies, but multiple government funds contributed $2.25 billion to SMIC’s companies. Semiconductor manufacturing equipment manufacturers such as North China Technology Group and SMIC Semiconductor Equipment are also receiving increased subsidies.
Subsidies for military-related companies such as AVIC Shenfei, which is engaged in the fighter jet business, and Beijing Beidouxing Navigation Technology, which is conducting the Chinese version of the Global Positioning System (GPS) business, are also increasing rapidly. In addition, subsidies for pharmaceutical companies engaged in the development of new vaccines and other businesses have increased significantly.