Wall Street Journal reports a jump in industrial subsidies for Chinese manufacturers
According to the Wall Street Journal's Dinny McMahon, manufacturers in China (in industrial sectors ranging from aircraft to steel to consumer appliances) are gaining more subsidies from the Chinese government:
Companies listed on China's stock exchanges received 85.68 billion yuan ($13.83 billion) in government subsidies last year, up 23% from a year earlier, while corporate profits rose less than 1%, according to a Chinese data provider. The subsidies were equivalent to more than 4% of the companies' total profits last year, up from around 3% between 2009 and 2011.
The subsidies—largely from local authorities but also from the national government—took the form of cheap land, tax rebates, support for loan repayments and straight-up cash. There were a range of reasons, including research and development and support for government environment priorities.
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