1. Home
  2. Studien
  3. China’s Market Distortions and the Impact of the Covid-19 Crisis
Jürgen Matthes in CESifo Forum Externe Veröffentlichung 16. September 2020 China’s Market Distortions and the Impact of the Covid-19 Crisis

Subsidization in China is pervasive at numerous levels of government and appears to be an inherent element of Chinese state capitalism. Despite a severe lack of transparency, the available information seems to suggest that the extent of Chinese subsidies is extraordinarily large.

Datei herunterladen
Externe Veröffentlichung
China’s Market Distortions and the Impact of the Covid-19 Crisis
Jürgen Matthes in CESifo Forum Externe Veröffentlichung 16. September 2020

China’s Market Distortions and the Impact of the Covid-19 Crisis

Externe Veröffentlichung

Datei herunterladen Zitieren

Kopieren Sie die Informationen:

Der Link wurde zu Ihrer Zwischenablage hinzugefügt!

Teilen Sie diesen Artikel:

oder kopieren Sie den folgenden Link:

Der Link wurde zu Ihrer Zwischenablage hinzugefügt!

Institut der deutschen Wirtschaft (IW) Institut der deutschen Wirtschaft (IW)

Subsidization in China is pervasive at numerous levels of government and appears to be an inherent element of Chinese state capitalism. Despite a severe lack of transparency, the available information seems to suggest that the extent of Chinese subsidies is extraordinarily large.

Moreover, the resulting overcapacities could lead to considerable and increasing distortions on the world market in certain sectors. An initial assessment of the potential effects of the Covid-19 crisis on China’s industrial policy model does not suggest a major change in subsidization policy. This constellation bodes ill for the future of the multilateral trading system. Until a few years ago, China was primarily a large and growing market and a low-cost production location for European firms. In the meantime, however, Chinese companies have become serious competitors. This is confirmed by various surveys of German and European firms (GTAI 2018; AHK 2019; European Chamber 2019). If the increasing competitive pressures from China were to be based on fair conditions, it would primarily be the task of European companies and economic policymakers to meet this challenge.

In fact, to some extent China derives normal competitive edges from cost advantages and economies of scale as well as from investing heavily in education and research. But beyond this, the Chinese state also employs problematic measures that seriously distort competition: subsidies, forced technology transfer, and unequal market access conditions. In particular, the Chinese government provides extensive direct and indirect subsidies for industrial policy purposes. However, the related empirical evidence is scarce because the state-capitalist system is complex and intransparent. Against this background, this article provides an overview of several available relevant studies that
shed light on subsidy-induced competitive distortions by China. 

Datei herunterladen
Externe Veröffentlichung
China’s Market Distortions and the Impact of the Covid-19 Crisis
Jürgen Matthes in CESifo Forum Externe Veröffentlichung 16. September 2020

Jürgen Matthes: China’s Market Distortions and the Impact of the Covid-19 Crisis

Externe Veröffentlichung

Datei herunterladen Zitieren

Kopieren Sie die Informationen:

Der Link wurde zu Ihrer Zwischenablage hinzugefügt!

Institut der deutschen Wirtschaft (IW) Institut der deutschen Wirtschaft (IW)

Teilen Sie diesen Artikel:

oder kopieren Sie den folgenden Link:

Der Link wurde zu Ihrer Zwischenablage hinzugefügt!

Mehr zum Thema

Artikel lesen
„Die Stärkung Europas muss von einer besseren Koordinierung zwischen Paris und Berlin ausgehen“
Michael Hüther im Handelsblatt-Podcast Audio 9. Juni 2023

Europa formen: „Die Stärkung Europas muss von einer besseren Koordinierung zwischen Paris und Berlin ausgehen“

Um Europa zu stärken, muss das deutsch-französische Tandem wieder besser laufen, finden IW-Direktor Michael Hüther und HRI-Präsident Bert Rürup in der neuen Folge des Handelsblatt-Podcasts „Economic Challenges“. Die führenden Politiker beider Länder sollten ...

IW

Artikel lesen
Jürgen Matthes / Björn Kauder / Samina Sultan in Martens Centre for European Studies Externe Veröffentlichung 5. Juni 2023

Reforming Economic and Monetary Union: Balancing Spending and Public Debt Sustainability

Fiscal policy in the EU faces the dilemma of having to meet large spending needs despite the existence of elevated public debt ratios. Fiscal policy therefore needs to put the member states on a sustainable path to gradual debt reduction.

IW

Mehr zum Thema

Inhaltselement mit der ID 8880