I wrote a similar comment about this on a different post.
They're unlikely to still be subsidized (or if it is it is small) but their subsidies did happen. China's industrial policy play book goes like this:
1. Erect barriers to foreign competitors. Subsidize domestic makers. This creates a chaotic fields of many domestic players that aren't particularly good nor efficient.
2. Remove or reduce subsidies and force the domestic players to fight for survival and thus innovate. The weaker ones will die off or get absorbed until there are only a few major domestic makers.
3. Lower barriers to foreign competitors (ie. invite Tesla to build a factory in Shanghai) to really ratchet up the competition and force innovation even more
4. Start exporting
It's not traditional subsidies but that early governmental incubation phase was a huge help in companies building up their infrastructure (subsidized by government) and know how.
Also, I want to point out this isn't an exclusively Chinese playbook but one that has been used by Japan and South Korea as well. The origin actually goes all the way back to Germany during their industrialization. The US doesn't do this because of our strong adherence to free market capitalism but people, even GOP Senator Rubio, is starting to reconsider this position.
They're unlikely to still be subsidized (or if it is it is small) but their subsidies did happen. China's industrial policy play book goes like this:
1. Erect barriers to foreign competitors. Subsidize domestic makers. This creates a chaotic fields of many domestic players that aren't particularly good nor efficient.
2. Remove or reduce subsidies and force the domestic players to fight for survival and thus innovate. The weaker ones will die off or get absorbed until there are only a few major domestic makers.
3. Lower barriers to foreign competitors (ie. invite Tesla to build a factory in Shanghai) to really ratchet up the competition and force innovation even more
4. Start exporting
It's not traditional subsidies but that early governmental incubation phase was a huge help in companies building up their infrastructure (subsidized by government) and know how.
Also, I want to point out this isn't an exclusively Chinese playbook but one that has been used by Japan and South Korea as well. The origin actually goes all the way back to Germany during their industrialization. The US doesn't do this because of our strong adherence to free market capitalism but people, even GOP Senator Rubio, is starting to reconsider this position.