4/4
businesses and government investment rather than to household consumption, this can constitute a very large subsidy (often larger than any other) that is hard to measure.
For those interested in reading the OECD study, you can find it here:
www.oecd.org/en/publicati...
2/4
The first and most obvious is the undervalued currency, which is the functional equivalent of a tax on imports and a subsidy for exports. Because it is hard to quantify the exact extent of the undervaluation of the RMB, most subsidy measures exclude it.
1/4
This OECD study is likely to have an important effect on global trade discussions, but its worth noting that its measure of the extent of Chinese subsidies do not include two of the most important subsidies that drive the global competitiveness of Chinese manufacturing.
3/4
The second is the financial subsidy. The study does try to quantify the extent to which certain manufacturers are able to borrow below "market" rates, but when the market rate itself is repressed, with nearly all credit being directed to...