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0 pointsvkou4y ago0 comments

> 1) the largest of the economies rising in Asia, being China, is funded in large part by state subsidies to this day. That won’t last forever.

The power of a sovereign to directly tax, and indirectly inflate its currency says otherwise.

You also need to quantify what it means for the economy to 'run off state subsidies'. There are particular sectors of the economy that are subsidized in China. The rest stand on their own. Smart subsidies reduce the overall cost to the economy, by building the foundation on which the rest could be built on.

100% of a state's economy obviously can't run off subsidies. But a smaller percentage can - and when invested smartly, grows the rest of the economy. Do you have any numbers for which fields of China's economy depend on these subsidies, and which percentage of those fields those subsidies represent?

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no_wizard4y ago

The 51% ownership clause is a subsidy. Chinese government still subsidies construction industry and the manufacturing sector, as well as tech[0]

At least 3% of the entire state budget is dedicated just to subsidies, this does not include tax breaks or other special incentives and this has been growing steadily[1][2]

[0]: https://www.uscc.gov/files/000566

[1]: https://www.washingtonpost.com/business/economy/initial-us-c...

[2]: https://asia.nikkei.com/Economy/Trade-war/China-corporate-su...

nl4y ago

Do you happen to know what the US equivalent is?

Reading [1] it said the company that received the most was Sinopec, with US$450M. But according to [2], Boeing has received over $15B in subsidies since 2000, so roughly comparable. And that doesn't count tax breaks[3] and doesn't seem to include agricultural subsidies which are huge in the US/

[1] https://asia.nikkei.com/Economy/Trade-war/China-corporate-su...

[2] https://subsidytracker.goodjobsfirst.org/top-100-parents

[3] https://taxbreaktracker.goodjobsfirst.org/prog.php?detail=st...

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