How preferential trade agreements address market distortions from state enterprises

Annex K. Difficulties in accessing firms’ financial information: Evidence from the OECD MAGIC database

Evidence from the OECD MAGIC database suggest that there are instances in which detailed financial information of companies is either not publicly available or imperfect. This Annex provides more details with respect to three of those instances.

In the last year, transparency has been declining as financial statements of certain large Chinese SE are no longer publicly available, rendering it impossible for the OECD to provide subsidy estimates. This is notably the case for the aerospace sector where the OECD has not been able to update its subsidy estimates for 2024 in China given that China’s largest aerospace and defence companies (i.e. the Aviation Industry Corporation of China [AVIC], the China Aerospace Science and Industry Corporation [CASIC], and the Commercial Aircraft Corporation of China [COMAC]) have failed to publish their financial statements. In this respect, Figure 10 below illustrates this erosion of transparency: it shows a break in the series for subsidies received by Chinese companies in the aerospace sector due to the fact that these three main companies could not be covered in the absence of publicly available financials.

Figure 10. Companies’ failure to publish their financial statements may mask the true extent of subsidisation in a sector: Evidence from the aerospace sector

Aerospace: total subsidies, percent of firm revenue

Note: Total subsidies comprise government grants, income-tax concessions, and below-market borrowings.

Source: OECD MAGIC database (accessed 9 March 2026).

Second, even in instances where the companies’ financial statements are still publicly available, the reporting of the subsidies received by certain companies has deteriorated in the last year. Table 4 captures this deterioration by showing through the example of one Chinese company how the level of details disclosed has recently evolved.

Table 4. Subsidy disclosure in Chinese financial statements has recently deteriorated

Disclosure of information with respect to the grants received by a Chinese company active in the auto parts sector have changed in the last year

Chinese company active in the sector of auto-parts
Subsidy information reported in Annual Report 2023 Under the section “Other Income”	Non-official translation	Grant amount
政府补助	Government subsidy	626 738.80 CNY million
Subsidy information reported in Annual Report 2024 Under the section “Other Income”	Non-official translation	Grant amount
其他收益	Other income	6 267 388 CNY thousand

Third, in the presence of conglomerates active across several industries covered by the MAGIC database, obtaining detailed information on the financial health of a sector-specific subsidiaries may prove a complex task. In this respect, the OECD could not thus far cover in the MAGIC database the subsidies received by two subsidiaries of China’s main rolling stock manufacturer CRRC, which are active in, respectively, the wind turbines and semiconductor sectors (CRRC Shandong Wind Power Co. Ltd. and Zhuzhou CRRC Electric Times). Nor could it include the subsidiaries of China Merchants (a Chinese joint-stock commercial bank) and Citic Heavy Industry (a Chinese conglomerate active across various sectors), which manufacture, shipbuilding for the former and heavy machinery for the latter.