An analysis published by the Organisation for Economic Cooperation and Development finds government subsidies to industry at their highest level since the global financial crisis. The OECD’s Manufacturing Groups and Industrial Corporations database - known as MAGIC - measures support by looking at what firms actually receive rather than what governments report they provide, offering a view into opaque subsidy systems, particularly in China.
According to the OECD, subsidies directed to the 15 industries tracked by MAGIC amounted to $108 billion in 2024, a figure only marginally below the peak recorded in 2023. When measured as a share of firms' revenues, the level of support in both years reached the highest point since western governments provided a range of state supports in 2009 at the height of the financial crisis.
The OECD identified the sectors that attracted the most assistance over the 2005-2024 period. Solar panels, semiconductors, aluminium, steel and shipbuilding topped that list, reflecting concentrated policy attention across energy-related manufacturing and heavy industry.
China emerges as a central factor in the rebound in subsidies. The OECD said that, on a conservative estimate, Chinese firms received on average three to eight times more government support than firms based in OECD countries between 2005 and 2024. The MAGIC approach, which records transfers to companies rather than relying on government declarations, is designed to reveal such disparities.
OECD Secretary-General Mathias Cormann commented on the link between subsidies and market outcomes. He said that among firms that gained market share between 2005 and 2024, subsidies accounted for about 22% of those gains overall. For Chinese firms specifically, that share rises to nearly 60%.
Despite the scale of financial support, the OECD found limited evidence that subsidies have translated into meaningful improvements in productivity or profitability. That observation raises questions about the efficiency of the transfers and their long-term impact on industrial performance.
Policy makers are expected to address these issues at an OECD ministerial meeting scheduled for Wednesday and Thursday, where officials will discuss potential steps to make global trade fairer. The MAGIC findings frame those discussions by quantifying the scale and industry concentration of support, and by highlighting the role such support has played in shifting market shares.
Data highlights:
- $108 billion in subsidies to 15 industries in 2024, slightly below 2023 peak.
- Highest subsidy-to-revenue ratios since 2009 for western state support during the financial crisis.
- Top subsidised sectors (2005-2024): solar panels, semiconductors, aluminium, steel, shipbuilding.
- Chinese firms received on average three to eight times more support than OECD-based firms (2005-2024).
- Subsidies explain about 22% of market-share gains overall, and nearly 60% for Chinese firms (2005-2024).