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And if so, to what extent?

Also, how does the extent of China's subsidies compare internationally?

(I understand this is a broad question but I can imagine that some economists somewhere have come up with some convenient measures or indices for this purpose.)

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    $\begingroup$ Do you mean direct subsidies or would you consider currency devaluation a subsidy as well? How about state sponsored infrastructure or education spending which helps make companies more competitive? $\endgroup$ – Giskard Dec 10 '16 at 7:59
  • $\begingroup$ As tax return, production upgrade incentive, grants etc. can be argued as "subsidise". So most country focus on "dumping" instead. $\endgroup$ – mootmoot Dec 12 '16 at 11:19
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World Trade Organization (WTO) rules prohibit export subsidies and China joined the WTO almost 15 years ago (in December 2001). As a condition of membership, China had to eliminate export subsidies in the late 90s. So, strictly speaking, China can't subsidize its exports.

However, Dani Rodrik considers that China subsidizes them indirectly through the exchange rate by maintaining an undervalued currency (here and here). Rodrik adds two interesting thoughts. First, the undervalued currency boosts China's growth and this, in turn, is good for the world's recovery and the alleviation of poverty. Second, China could maintain its growth without trade imbalances if it could introduce industrial subsidies to offset a rising yuan. So, it be would better to subsidise tradables directly than to subsidise them indirectly through the exchange rate.

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  • $\begingroup$ " As a condition of membership, China had to eliminate export subsidies in the late 90s. So, strictly speaking, China can't subsidize its exports." Ha, it's not quite that straightforward. Subsidies are a constant cat-and-mouse game, and turn heavily on subtle classification distinctions. China admitted in 2016 to prohibited subsidies. ft.com/content/4f4d1240-024a-11e6-99cb-83242733f755 $\endgroup$ – Jess Riedel Mar 24 '18 at 12:51
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Subsidized export lowers cost to ship goods from China and helps to provide pricing benefits over locally produced products in receiving countries. Broad examples are found with the Universal Postal Union, Asia-Europe rail subsidies and china ship-building subsidies.

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    $\begingroup$ Note that in the case of the Universal Postal Union, it has been the receiving countries who have been subsidizing shipping costs from China, but the example is still important. $\endgroup$ – Luke Oct 30 '18 at 20:35
  • $\begingroup$ Doesn't this merely mitigate transport cost? In this case exports are not sold at lower than marginal cost prices. $\endgroup$ – Giskard Oct 30 '18 at 23:06

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