China increased its subsidies for domestically listed companies in 2018 to a record amount of RMB 153.8 billion ($22.3 billion) rising 14% year-on-year, to help companies manage the slowdown of the world’s second-largest economy, a move likely to further strain trade talks with Washington, according to financial database Wind, reported the Financial Times.
“This data just reinforce[s] the impression that Chinese companies start the race for business far ahead of their competitors,” said Scott Kennedy, director of the project on Chinese business and political economy at the Center for Strategic and International Studies in Washington. He said the disclosed payments exclude “a range of implicit subsidies and other non-tariff barriers.”
One of China’s largest oil companies Sinopec, was the top recipient last year, receiving RMB 7.5 billion in subsidies. Automakers also received some of the largest payments as car sales in China shrank for the first time in almost three decades, with state-owned Shanghai Auto receiving RMB 3.6 billion.
Last year’s subsidies were equivalent to 4% of listed companies’ RMB 3.7 trillion total net profits, according to Wind. Revenue growth of listed companies slowed to 12.7%, down nearly 7% year-on-year in 2018.