Industrial subsidies peaked in absolute terms in 2023 before declining slightly in 2024. As a share of firms’ sales revenue, subsidies reached 1.3% in 2024 — the second highest level on record after 2009 (Figure 1, right). The 2009 peak, however, coincided with a severe global recession, when a 15% year‑over‑year collapse in sales mechanically inflated the subsidy‑to‑revenue ratio. This was not the case in 2023‑24, which indicates the recent increase in industrial subsidies to be more structural. In nominal terms, subsidies across the 15 industrial sectors covered by the OECD MAGIC database totalled USD 108 billion in 2024 (Figure 1, left), or USD 94 billion at constant 2015 prices. Both figures represent the second‑highest levels observed to date, following the record high in 2023.
OECD MAGIC Database of Industrial Subsidies
Source: OECD MAGIC database.
All three subsidy instruments covered by the OECD MAGIC database matter, with government grants, corporate income tax concessions, and below-market-borrowings (BMB) having each contributed a sizable amount to the total industrial subsidies measured over the period 2005‑24. Of these three instruments, BMB appear to play a more countercyclical role, having increased in times of crisis or to rescue firms in distress (e.g. the rescue of U.S. carmakers in 2009 or the People’s Republic of China’s (hereafter “China”) support for its heavy industries in 2015‑16). This may be due to firms experiencing worsening financing conditions and tighter access to credit during crisis times or to the relative speed and ease with which BMB can be deployed in emergency situations compared with grants and tax concessions (OECD, 2025[4]).1 Many tax concessions also require firms to be earning a profit for them be effective and are therefore of limited help in rescuing lossmaking companies.
From a geographical standpoint, industrial firms based in China tend to receive more subsidies relative to their revenues than their competitors based everywhere else. Between 2005 and 2024, Chinese firms received on average three to eight times more government support than firms based in the OECD (Figure 2, left). These subsidies were also considerably higher than the support received by firms based in non-OECD economies such as Brazil, India, and Indonesia, which were comparable in relative terms to the subsidies received by companies based in North America. The right-hand side of Figure 2 reveals that in almost all regions industrial subsidies were higher in 2024 than in average over the period covered by the database (Figure 2, right). That said, the difference between subsidies received by Chinese firms and firms elsewhere remained higher in 2024.2
Note: The values above are averaged by geographical grouping using firms’ revenue as weights. Geographical groupings are based on the location of firms’ headquarters or main place of production, which does not always correspond to where companies receive their subsidies.
Source: OECD MAGIC database.
The types of subsidy instruments used to support industrial companies vary across countries, which reflects institutional differences in how jurisdictions channel government support. Companies based in Japan, Korea, and the United States tend, for example, to benefit mainly from tax concessions, generally in relation to R&D and investment in fixed tangible assets. By contrast, companies based in Europe receive more of their support in the form of government grants and, to a lesser extent, BMB.3 Firms based in China tend to receive a large proportion of their support in the form of grants and BMB, with the latter proving especially large. China’s greater use of BMB is made possible by the structure of the country’s financial system, notably the fact that most corporate loans are issued by state banks and policy banks at rates close to China’s one-year lending benchmark (OECD, 2021[5]; OECD, 2024[6]) (Figure 3).
Note: The zero line denotes companies’ base rates applicable to their borrowings (e.g. a weighted average of Secured Overnight Financing Rate and Euribor). Actual interest rates incurred by companies are based on their average effective rates of interest used in the calculation of BMB in the OECD MAGIC database. A positive (negative) number implies an average effective interest rate above (below) the base rate.
Source: based on the OECD MAGIC database.
Between 2005 and 2024, the production of solar photovoltaic panels, semiconductors, aluminium, steel, and shipbuilding were the top five recipient of subsidies across the 15 sectors covered in the OECD MAGIC database (Figure 4, panel A). The year 2024 (Figure 4, panel B) saw large increases in the average subsidy-to-revenue ratio in the production of steel, solar panels, wind turbines, heavy machinery, and rolling stock and signalling. Some of these sectors, however, faced a decrease in global sales in 2024, which had the effect of increasing the subsidy-to-revenue ratio independently of the subsidies received. This was especially the case in steel, where firms in the sector incurred a considerable fall in their sales and profitability, which, combined with higher subsidies, resulted in a large increase in their subsidy-to-revenue ratio. The fall in revenue and profits was even more marked in solar panels, which led to an increase in the subsidy-to-revenue ratio despite an overall reduction in the subsidies received by solar panel manufacturers. Conversely, even though semiconductor companies received larger subsidies in 2024, the value of their sales increased to such an extent (+30% year-over-year) that the sector’s subsidy-to-revenue ratio declined marginally in 2024.
Note: AERO: Aerospace and defence; ALUM: Aluminium; AUTO: Automobile; CEMT: Cement and other building materials; CHEM: Chemicals; FERT: Fertilisers; GLAS: Glass, ceramics and refractories; MACH: Heavy machinery; SEMI: Semiconductors; SHIP: Shipbuilding; SOLA: Solar photovoltaic cells and modules; STEE: Steel; TELC: Telecommunications network equipment; TRAN: Rolling stock and signalling; WIND: Wind turbines.
Source: OECD MAGIC database.
At the sector level, global average subsidies as a percentage of firms’ revenue mask significant differences across countries (Annex A). While the average level of support globally to the production of wind turbines over the 2005‑24 period is around 1%, subsidies to firms based in China have been consistently above 2% of firm revenue over the past 15 years, and above 5% in multiple years over that period. Similarly, while global average subsidies for semiconductors are just over 2% of firm revenue, for firms based in China, subsidies reached nearly 10% of firm revenue in 2021 and 2022.
Sectors differ considerably in terms of the types of subsidies they attract. Heavy industries typically receive large amounts of BMB as companies in these sectors tend to rely relatively more on debt financing than on equity. Many large producers of steel, aluminium, cement, and chemicals thus have large amounts of debt on their balance sheets and relatively weak credit ratings in many cases. Debt-asset ratios in 2024 were, on average, 0.32 in chemicals, 0.31 in steel, and 0.26 in aluminium while being closer to 0.21 in all other sectors.
Technology-oriented sectors (e.g. semiconductors and telecommunications network equipment) typically attract a greater proportion of tax concessions. This larger contribution of tax concessions reflects, among other things, tech companies’ larger R&D spending, which governments often support through dedicated tax provisions. It also reflects governments’ inclination toward offering tech companies investment tax incentives in the hope of encouraging domestic investment and technology spillovers in sectors deemed strategic. Besides the subsidy packages recently introduced in OECD Member countries for supporting investment in semiconductors and renewable energy, several emerging economies typically offer tax holidays or special reduced tax rates aiming to encourage foreign tech firms to invest locally.
Unlike tax concessions, BMB do not appear to be very large in technology-oriented sectors due to the fact that these sectors rely relatively more on equity financing than debt. Indeed, some governments have relied on injections of government equity into semiconductor companies as a means of supporting domestic chip champions (OECD, 2019[7]). While the OECD MAGIC database does not yet account for government support provided through the equity channel, work is underway to add below-market equity as one other subsidy type in the database.
Governments retain large equity stakes in many of the companies covered in the OECD MAGIC database. This ranges from full government ownership of companies to minority stakes held by government investment funds. Government ownership of industrial companies was, in 2024, the largest in shipbuilding, followed by steel, aluminium, fertilisers, rolling stock and signalling equipment, and aerospace and defence (Figure 5). While government ownership may not be problematic in and of itself, it can serve as a conduit for government support wherever governments do not manage their state enterprises (SEs) as regular shareholders would but instead exercise their control of companies in the service of their industrial policies.4
Note: AERO: Aerospace and defence; ALUM: Aluminium; AUTO: Automobile; CEMT: Cement and other building materials; CHEM: Chemicals; FERT: Fertilisers; GLAS: Glass, ceramics and refractories; MACH: Heavy machinery; SEMI: Semiconductors; SHIP: Shipbuilding; SOLA: Solar photovoltaic cells and modules; STEE: Steel; TELC: Telecommunications network equipment; TRAN: Rolling stock and signalling; WIND: Wind turbines.
Source: OECD MAGIC database.
On average, SEs have been relatively larger recipients of industrial subsidies than their private competitors (Figure 6). The OECD MAGIC database collects detailed information on the ownership structure of the companies it covers, enabling it to classify firms according to the extent of their government ownership. These data show that companies with more than 25% of government ownership tended to receive relatively more government grants and BMB over the period 2005‑24.
Note: The values above are averaged by government ownership category using firms’ revenue as weights.
Source: OECD MAGIC database.
The finding that SEs are relatively larger recipients of grants and BMB stems partly from the fact that these companies are often found in heavy industries – characterised by more debt financing and BMB (Figure 4). Because SEs are relatively uncommon in tech industries and in renewable energy (Figure 5) – and since these sectors receive relatively large amounts of tax concessions – it is unsurprising to find that SEs receive on average fewer tax concessions than private companies (Figure 6). Not only are SEs less prone to invest in R&D – which lessens the scope for large R&D tax concessions – but they also have a considerably smaller international footprint as indicated by their percentage of domestic fixed tangible assets, which reduces the scope for SEs to benefit from foreign tax incentives. In contrast, SEs’ very large BMB are evidence of their preferential access to debt financing at rates which do not fully reflect their credit risk and which may involve implicit government guarantees.
Not only are SEs relatively large recipients of industrial subsidies but they can also be important enablers or intermediaries of government support. In particular, the provision of BMB generally involves state banks in the position of loan issuers, who thus act as subsidy providers on behalf of their government shareholders. Government equity injections can also at times involve government investment funds serving as conduits for government support. Government ownership of companies thus forms an important component of the subsidy landscape, with SEs potentially operating on both sides of a subsidised transaction. Along with the lack of transparency about which firms are SEs, this can generate additional opacity around the true scope and scale of industrial subsidies (OECD, 2024[6]).5
Lack of transparency remains a key challenge for understanding the scope and scale of industrial subsidies and many governments’ poor track record in this area has been a key motivation behind the firm-level methodology of the OECD MAGIC database.
Article 25.1 of the WTO’s Subsidies and Countervailing Measures (SCM) Agreement requires Members to notify their subsidies annually, yet compliance has remained low. While the number of Members complying with the notification obligation remained fairly stable over the 1995‑2025 period, the number of Members not making any notification rose sharply from 26 (in 1995) to 117 (in 2025).6 While this may partly reflect the technical difficulties and capacity limitations that some WTO Members face, the percentage of Members that did not make any notification rose from 23% (in 1995) to 70% (in 2025) which implies a systemic issue.7
Although a number of WTO Members do notify their subsidies, their notifications may be incomplete. As the obligation to notify is built around the definition of subsidy in Articles 1 and 2 of the SCM Agreement, disagreement about the scope of the definition have led to different expectations about the completeness of notifications, which have in cases not included subsidies granted by subnational levels of government. As those subsidies can be considerable, the lack of completeness erodes the usefulness of these notifications. In this context, the use of firm-level data offers a complementary lens, which helps improve clarity on the global scope and scale of industrial subsidies despite the lack of sufficient government transparency.
Rules on corporate disclosures normally remain within the purview of private actors and accounting standard-setting bodies but governments have nevertheless a useful role to play. In one example, in 2017, Italy published legislation requiring all companies receiving subsidies to publish the amounts they obtained from Italian authorities in their financial statements (OECD, 2023[2]). There are also encouraging signs that accounting standard-setting bodies are themselves expanding their rules on subsidy disclosure by companies. For instance, in 2021, the U.S. Financial Accounting Standards Board introduced a rule requiring all business entities following the Generally Accepted Accounting Principles (GAAP) to report the government assistance they obtained in the notes to their financial statements. The U.S. Securities and Exchange Commission has responsibility for enforcing the GAAP, which effectively makes subsidy disclosure a mandatory requirement for US-based companies. Sustainability reporting by firms has also evolved to better account for government financial assistance, with the Global Reporting Initiative’s 2016 standard on “Economic Performance” requiring companies to report the value of the financial assistance they received from any government over a given period. These different initiatives have visibly improved the quality of subsidy disclosures by companies in a context where governments are increasing the level of support they provide to their manufacturers.
However, improvements in firm-level subsidy disclosures have not been universal. Notably, there has been a trend toward less granular subsidy disclosures and a lesser availability of financial statements for firms based in China. Where companies previously disclosed detailed lists of their government grants, many are now only disclosing one aggregate heading under the “other income” category in their financial statements. Meanwhile, the financial statements of large unlisted SEs are becoming increasingly difficult to access. Examples include large state-owned actors in China’s aerospace and defence industry – namely the Commercial Aircraft Corporation of China (COMAC), the Aviation Industry Corporation of China (AVIC), and the China Aerospace Science and Industry Corporation (CASIC) – for which financial statements are no longer available online as of the early 2020s. For this reason, the OECD MAGIC database is unable to provide estimates of subsidies for aerospace companies based in China for the year 2024.
China is, however, not alone in having recently reduced the availability of corporate disclosures. In the case of the Russian Federation (hereafter “Russia”), several large manufacturing firms have stopped releasing their financial statements since the country’s large-scale invasion of Ukraine, citing in particular the country’s new Federal Law No. 1102 of 4 July 2023 “[o]n the specifics of Disclosure and (or) Provision of Information Subject to Disclosure and (or) Provision in Accordance with the Requirements of the Federal Law ‘On Joint-Stock Companies’ and the Federal Law ‘On the Securities Market’.”
While firms’ financial disclosures are primarily meant for investors and to enable the sound functioning of capital markets, they nonetheless serve a broader purpose. Imperfect or unavailable financial disclosures from firms hamper the public’s ability to monitor the economic performance of key actors in the global economy generating uncertainty as to whether firms are competing on a level playing field.
← 1. The provision of emergency loans to firms in distress can, however, increase firms’ indebtedness. This has led governments at times to offer debt-equity swaps or equity infusions to improve distressed firms’ balance sheets (OECD, 2021[5]). Work to include estimates of below-market equity in future versions of the OECD MAGIC database is underway.
← 2. As the OECD MAGIC database looks at individual firms rather than countries, data on subsidies can include support firms receive across the different jurisdictions in which they operate. The difference in where firms locate their productive assets implies that some of the subsidies for OECD-based firms come from China but that almost all the subsidies benefitting Chinese firms come from China (detailed information on the methodology behind MAGIC available here).
← 3. While companies based in North America received on average relatively more BMB over the entire period 2005‑24, this was almost entirely due to the large loans the U.S. Treasury Department provided to Michigan-based carmakers during the global financial crisis of 2008‑09. Absent these loans, subsidies in the form of BMB have been relatively small for firms based in North America (Figure 2, right).
← 4. The revised OECD Guidelines on Corporate Governance of State-Owned Enterprises (the SOE Guidelines) provide concrete guidance to help policymakers evaluate and improve the legal, regulatory, and institutional framework for the ownership and governance of SOEs (OECD, 2024[15]).
← 5. While information on which companies are partly or fully owned by government entities is generally publicly available, there are cases where ownership through chains of entities can mask beneficial ownership of companies by governments.
← 6. WTO, Committee on Subsidies and Countervailing Measures, Notifications Provisions under the Agreement on Subsidies and Countervailing Measures, Background Note by the Secretariat, G/SCM/W/546/Rev.19, 3 October 2025.
← 7. A further issue concerns the lack of timeliness, as many annual notifications are submitted, if at all, after the deadline of the end of June.