OECD MAGIC Database of Industrial Subsidies

Annex A. Sector annexes

The following annexes present summary data for each of the 15 industrial sectors covered by the OECD MAGIC database. Sector-level data are presented only for the period 2010‑24 due to some individual sectors having relatively fewer data for the period 2005‑09 (e.g. shipbuilding and solar panels). This can occur, for instance, where companies which used to be top actors in a sector have either disappeared or exited the industry, making it difficult to locate the necessary raw data.

Please note that the geographical groupings used to compare firms based on the location of their headquarters can vary across sectors depending on the number of firms covered in each case. This was done with a view to maintaining confidentiality of the firm-level data.

Aerospace and defence (AERO)

In the context of the OECD MAGIC database, the aerospace and defence sector covers firms operating along the aircraft supply chain, including both original equipment manufacturers (OEMs) producing aerospace and defence platforms (e.g. commercial aircrafts and helicopters) and upstream suppliers of key aerospace components and system suppliers (e.g. aircraft engines). While the intended focus of the OECD MAGIC database is on civilian activities, it is generally difficult to separate the commercial and defence operations of aerospace firms as most operate as dual-use producers, serving both civilian and military markets. The database thus includes many firms whose defence operations overlap with civilian aerospace. Companies focussing solely on military activities such as ground military vehicles, firearms, or ammunition are excluded from the sample.

Figure A A.1. Aerospace and defence – Subsidies by firms’ headquarters location

Note: Subsidies comprise government grants, income-tax concessions, and below-market borrowings. *Data are not available for China’s aerospace sector in 2024 due to a deterioration in the availability of financial information for the largest producers. Values for China in 2023 were repeated for 2024 in the left hand-side graph.

Source: OECD MAGIC database.

The aerospace and defence market has long been dominated by companies based in North America and Western Europe, but it is evolving into an increasingly diversified landscape. While Western-based companies remain market leaders, they have recently faced considerable backlogs and supply strain as global demand grows, driven mainly by the Asia-Pacific region and Gulf countries. China, India, Japan, and Korea have also taken on a more important role in the aerospace global supply chain, first as innovation-driven component suppliers but also increasingly as OEMs themselves. Bearing in mind that most industry publications mix aerospace and broader defence activities together, data from these sources suggest nevertheless that the aerospace and defence firms included in the OECD MAGIC database accounted for at least two-thirds of the global aerospace market as of 2024.

Between 2010 and 2024, aerospace subsidies evolved unevenly across the different regions. In nominal terms, subsidies expanded throughout the period but saw pronounced surges in 2020 and 2023, driven primarily by increases in the support received by firms based in China and in North America. The 2020 peak corresponded partly to the COVID-19 pandemic, which severely disrupted the air transport sector globally and led governments to offer some aerospace companies temporary tax relief and wage subsidies. When viewed relative to firm revenue, Chinese producers exhibited persistently higher subsidy levels throughout the period, often two to five times greater than those received by OECD-based companies. While companies based in North America and Europe had larger subsidies in nominal terms – mainly owing to their larger size –, their subsidy-to-revenue ratio remained relatively low and stable, except in 2020‑21.

Grants and tax concessions were the largest forms of subsidies used in the aerospace industry over the whole period covered. The important role played by these types of subsidies results in part from the sector’s heavy investments in R&D, which are often supported through dedicated grants, tax credits, and additional tax deductions. By contrast, below-market borrowings (BMB) appear to have been relatively less important, due partly to aerospace companies’ capital structure, which generally favours equity financing over debt financing. BMB notably saw a significant decrease in 2016, due to a combination of lower bond spreads and higher revenue in China’s aerospace sector. While the OECD MAGIC database does not yet cover support provided in the form of government equity offered on non-market terms, efforts are underway to study this subsidy channel and assess its contribution to the aerospace sector.

Figure A A.2. Aerospace and defence – Subsidies by instrument

Note: *Data are not available for China’s aerospace sector in 2024 due to a deterioration in the availability of financial information for the largest producers.

Source: OECD MAGIC database.

Aluminium (ALUM)

Aluminium is a non-ferrous metal valued for its durability, lightness, and conductivity. It is a critical upstream product used in several key manufacturing sectors, including aerospace and defence, automobiles, and solar panels, as well as an essential building material. Because many aluminium producers are vertically integrated, the OECD MAGIC database covers under the aluminium sector several stages of the value chain, including the refining of alumina (i.e. aluminium oxide), the smelting of primary aluminium, and the production of semi-fabricated products of aluminium downstream (e.g. rolled products and extrusions). To the extent possible, the data seek to avoid bauxite mining, though this is not always possible where companies cover all stages of the aluminium value chain.

China accounted for nearly 60% of the global production of primary aluminium in 2024 (up from about 24% in 2005), so the sample of firms covered in the OECD MAGIC database understandably includes many companies based in China.1 Meanwhile, OECD Members have seen their share of global primary output fall from 38% in 2005 to 12% in 2024 while Gulf Cooperation Council countries grew their share from 0% in 2005 (no production then) to 9% in 2024. To the extent possible, the sample of aluminium companies used in the database aims to reflect these changes.

Figure A A.3. Aluminium – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

Aluminium firms based in China were by far the largest recipients of subsidies in the sector between 2010 and 2024. This was true both in value and relative to the revenue of companies. Many of these subsidies appear countercyclical in that support has tended to increase when aluminium prices on the London Metals Exchange were decreasing, which suggests that governments may have attempted to provide relief to aluminium producers or to prevent the decommissioning of uneconomic production capacity. As a percentage of firms’ sales revenue, subsidies reached their peak in 2015 when China experienced stock market turbulence and metal producers faced the lowest prices seen over the period covered, at around USD 1 600 a tonne for aluminium. Subsidies in value also increased noticeably starting in 2021 around the time China entered a severe real estate crisis.

Below-market borrowings (BMB) make up most of the subsidies measured for the aluminium sector in the OECD MAGIC database. This is partly due to aluminium producers having relatively large volumes of debt relative to their assets and some having also relatively weak credit ratings. While they appear more modest on average, government grants and tax concessions are not insignificant, with grants having notably peaked in 2015, similar to BMB. Although the OECD MAGIC database is the first to provide granular, comprehensive, and comparable estimates of subsidies benefitting the aluminium industry, it does not exhaust all the possible ways in which governments are able to support the sector. Of particular importance for the aluminium industry is the provision of energy to producers at subsidised prices since the smelting of primary aluminium forms one of the most electricity-intensive production processes.2 More information on energy subsidies benefitting the aluminium industry can be found in OECD (2019[10]; 2023[11]).

Figure A A.4. Aluminium – Subsidies by instrument

Source: OECD MAGIC database.

Automobile (AUTO)

The car industry makes up the largest of all the industrial sectors covered by the OECD MAGIC database, with global sales nearing USD 3 trillion and sustaining millions of jobs in OECD countries. The automotive sector in the database focuses on carmakers themselves, i.e. the final producers of commercial and passenger motor vehicles. This includes both vehicles equipped with internal combustion engines and battery electric vehicles (BEVs). It does not cover the production of automotive parts and components, including batteries destined for electric vehicles. The automotive sector is thus downstream of other industries covered in the database such as steel, aluminium, semiconductors, and glass, which all provide key inputs into the production of cars.

While major carmakers have traditionally been based in OECD countries – even as they operate across multiple continents and countries –, recent years have seen Chinese carmakers grow their market share significantly, particularly in the production of BEVs and plug-in hybrid vehicles (PHEVs). The sample of carmakers covered in the OECD MAGIC database aims to reflect these changing realities by including new entrants as well as legacy carmakers. The sample accounts for about 80% of global sales by value according to Factset data.

Figure A A.5. Automobile – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

Figure A A.6. Automobiles – Subsidies by instrument

Source: OECD MAGIC database.

Carmakers based in China have continuously received larger subsidies – both in absolute and relative terms – than OECD-based firms, with the exception of the one-off rescue of several large OECD carmakers during the global financial crisis of 2008‑09. Chinese carmakers received twice as much support in absolute terms and four times more support in relative terms compared with OECD-based firms. These larger subsidies for Chinese carmakers reflect both longstanding support to the country’s state-owned legacy carmakers as well as the more recent introduction of support for new BEV entrants, which are predominately privately owned. It should also be noted that some of the support obtained by OECD-based carmakers was in several cases received by their Chinese subsidiaries from Chinese authorities.

Between 2010 and 2024, income-tax concessions were the largest form of subsidy in the sector, followed by grants. While relatively modest over the period, below-market borrowings (BMB) saw a sudden spike during the global financial crisis as governments responded to the financial distress of large carmakers using direct government lending and equity injections. This still shows in the data for 2010 although support was quickly wound down in 2011. More recently, from about 2019, there has been a noticeable increase in the grants and BMB received by carmakers based in China, reflecting a sustained push by Chinese authorities to support their “new energy vehicle” industry.

Cement and other building materials (CEMT)

Cement is one of the most widely used materials globally due to its central role in the construction of buildings and infrastructure. Its production process in horizontal rotating kilns is highly energy intensive and emits large amounts of CO₂. In the OECD MAGIC database, the sector covers firms predominantly engaged in the manufacture of Portland cement and other clinker-based products, though it can also include aggregates such as sand, gravel, and crushed stone. Coverage excludes building materials such as architectural glass and ceramic tiles, which are covered under “glass, ceramics and refractories” in the database. The sector comprises a heterogenous set of firms ranging from privately owned multinationals to regional producers and state-owned enterprises.

Global demand for cement is fundamentally driven by population growth, rapid urbanisation in emerging and developing economies, and significant government investments in infrastructure projects worldwide. Because cement is mainly traded regionally due to its unfavourable weight-to-value ratio, global production patterns tend to follow demand drivers, with China and India, followed by Viet Nam and the United States being the largest producers. China stands out, however, with the country alone still accounting for nearly half of global output in volume even after the onset of its real estate crisis. According to the U.S. Geological Survey, China produced more cement in three years than the United States did throughout the entire twentieth century.3 The sample of cement-producing firms covered by the OECD MAGIC database reflects these trends as it includes a significant number of companies based in China, as well as large multinationals based in the OECD and a sizable number of firms based in other emerging and developing markets (e.g. Brazil, Egypt, India, Indonesia, Nigeria, Thailand, and South Africa). Many of these companies are state enterprises or have at least government entities as large shareholders.

Figure A A.7. Cement – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

Subsidies for cement producers are generally larger for firms based in China in both absolute and relative terms, although firms based in other non-OECD jurisdictions have also received substantial amounts of support relative to OECD firms. Subsidies for cement production appear to have peaked in 2015 before increasing again in recent years. Both increases correspond to periods of slowdown in China’s heavy industries, with the more recent episode directly tied to the country’s real estate crisis, which began in 2021. This suggests that cement subsidies are partly countercyclical, similar to aluminium subsidies. While relatively small, subsidies for OECD-based cement producers saw an increase around 2022‑23 in the form of support schemes to help energy-intensive businesses cope with the higher energy prices resulting from Russia’s large-scale invasion of Ukraine.

All three forms of government support played a role in the sector, although below-market borrowings have grown in importance in recent years, particularly in China. There has also been a notable rise in government grants and tax concessions, especially for OECD-based companies, which include support to offset the high energy prices caused by Russia’s large-scale invasion of Ukraine. While the OECD MAGIC database does not cover the direct provision of energy inputs at below-market prices, evidence for an illustrative sample of cement producers has shown these to be important as well (OECD, 2023[11]).

Figure A A.8. Cement – Subsidies by instrument

Source: OECD MAGIC database.

Chemicals (CHEM)

Due to their upstream nature and widespread usage, chemicals are essential inputs for virtually all downstream manufacturing sectors, such as automotive and electronics. The scope of products manufactured by chemical producers is broad, encompassing both the production of basic chemicals (e.g. petrochemicals and sulfuric acid) and specialty chemicals. Coverage of the industry in the OECD MAGIC database is therefore understandably diversified as it includes the refining of hydrocarbons into petrochemicals, advanced polymers, industrial gases, and the processing of mineral ores into chemical precursors used in the manufacture of batteries (e.g. lithium, graphite, and cobalt).

Historically, large integrated chemical firms tended to be based in OECD countries, with extensive networks of subsidiaries located globally near important feedstock and energy sources. Proximity to feedstock likewise explains the relatively large role played in the industry by companies based in the Gulf region and other resource-endowed regions (e.g. Russia). The past two decades have also seen large companies based in emerging economies take on a more prominent role, and in particular China, which has achieved considerable scale by merging large state actors. Given the scope of products, companies, and countries involved, coverage of the chemicals sector in the OECD MAGIC database is characterised by a relatively large number of firms based in many different jurisdictions.

Figure A A.9. Chemicals – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

Chemical producers based in China were by far the largest recipients of subsidies between 2010 and 2024, both in absolute and in relative terms. While changes in sales revenue explain some of the variation seen in the subsidy-to-revenue ratio, the increase in the subsidies received by China-based firms between 2021 and 2023 stemmed mainly from a more rapid increase in subsidies. This increase was then reversed in 2024 in a context of state-led consolidation of China’s chemical sector, which affected firms’ revenue and subsidy numbers. The subsidies received by firms based outside China were, meanwhile, considerably lower, although recent subsidy programmes did at times cause sporadic increases in support (including during the COVID-19 pandemic).

Tax concessions and below-market borrowings (BMB) played a comparatively larger role in the chemicals sector, with BMB having grown in importance since the mid-2010s. This is largely explained by chemicals producers having relatively large debt-asset ratios (the second largest on average after solar panels) and by the presence of large state enterprises in the sector with both poor standalone credit ratings and large implicit guarantees from their government shareholders. These factors together resulted in a large volume of BMB for the industry, notwithstanding the recent decrease seen in 2024, which was amplified by the state-led consolidation noted above and the resulting absorption of weaker state enterprises – rated well below investment-grade – by more financially robust ones.

Figure A A.10. Chemicals – Subsidies by instrument

Source: OECD MAGIC database.

Fertilisers (FERT)

Fertilisers are a major input into global agricultural production. The fertiliser industry spans the extraction and processing of primary nutrients (nitrogen, phosphorus, and potassium) as well as the production of compound and specialty fertilisers downstream. The nature of actors involved in the sector varies based on geography, resource endowments, and industrial expertise. Coverage of fertiliser firms in the OECD MAGIC database spans globally integrated firms operating across multiple nutrient segments, as well as regional players benefiting from access to specific resource deposits (e.g. phosphates) and low-cost natural gas. As a result, the fertiliser industry tends to be geographically concentrated. This can give rise to critical trade choke points, which in the event of trade tensions or supply chain disruptions, can undermine access to fertilisers, including by significantly increasing prices, and ultimately impacting the stability of global agricultural markets.

Coverage of the fertiliser industry in the OECD MAGIC database includes a relatively large proportion of firms based in China, India, and Russia, reflecting the structure of the industry globally. The OECD-based companies covered are often vertically integrated multinationals engaged in the processing of nutrients and manufacturing fertilisers for global distribution. Most of their sales are derived from the export of higher value-added fertiliser products. Firms based outside China and the OECD are often more specialised in the initial processing and refining of key inputs and are principally located in Eastern Europe (e.g. Belarus and Russia), the Middle East, and North Africa (e.g. Morocco). They leverage their abundant resources and access to lower-cost energy to serve as primary global exporters of feedstock, such as potash, urea, ammonia, and phosphate. While some of these firms possess the capacity to produce finished fertiliser products for domestic supply, many are primarily engaged in supplying essential feedstocks to global producers. Firms based in China have become pivotal actors in the global industry, although they continue to derive much of their revenue domestically.

Figure A A.11. Fertilisers – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

Subsidies for fertiliser production grew in value starting in the mid-2010s, reaching a peak in 2021‑23 at a time when energy prices (and natural gas in particular) were especially high. Their evolution was, on the other hand, relatively flat relative to revenue, with occasional peaks seen in recent years. From a geographical standpoint, fertiliser firms based in China were larger recipients of subsidies between 2010 and 2024, both in absolute terms and relative to their sales revenue. Companies based in the OECD and elsewhere received, meanwhile, lower levels of support relative to their sales.

Figure A A.12. Fertilisers – Subsidies by instrument

Source: OECD MAGIC database.

Below-market borrowings (BMB) have been used relatively more in the sector, including as a form of counter-cyclical support during periods of elevated feedstock prices. Income tax concessions also played a significant role for most firms, albeit for different underlying reasons. Some tax concessions have involved investment incentives for specific projects while others have provided for company-wide preferential rates of tax. Grants were also offered in 2023‑24 to offset the impact of higher energy prices on fertiliser production. While the OECD MAGIC database does not cover the direct provision of energy inputs at below-market prices, evidence for an illustrative sample of fertiliser producers has shown these to be important as well (OECD, 2023[11]).

Glass, ceramics and refractories (GLAS)

Glass, ceramics, and refractories encompass the production of inorganic, non-metallic materials formed by high-temperature processes and used across construction, transportation, electronics, energy, and industrial manufacturing. The products covered by the OECD MAGIC database are therefore heterogenous in nature as companies in the sector are often horizontally integrated across the different subsectors. Glass products include architectural glass, automotive glass, photovoltaic glass, and fibreglass. Ceramics range from specialty products used in the electronics industry (e.g. high-performance ceramics), to refractory materials, and ceramic tiles used in construction. The firms covered in the sector are therefore wide-ranging and occupy different tiers along the value chain and the sophistication ladder. They are also upstream of several other sectors covered in the OECD MAGIC database, including the production of cars and solar panels.

Traditionally, companies based in Europe, Japan, and the United States constituted the major players for glassmaking, advanced ceramics, and high-performance refractories thanks to their technological leadership and capital-intensive production. However, since the 2000s, Asia, and more specifically China and India, have taken the lead as both global producers and consumers across many of the subsegments. Besides the policy environment, this shift was driven by a variety of structural factors, chief among them a boom in construction, lower production costs, and OECD-based companies opting to focus on high-tech, low-volume segments. Although the heterogeneity of the sector makes it difficult to judge the proportion of the global market covered by the firms included in the OECD MAGIC database for this sector, the database covers most major manufacturers of glass, ceramics, and refractories.

Figure A A.13. Glass, ceramics, and refractories – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

Subsidies for the production of glass, ceramics, and refractories have risen sharply in absolute terms across all regions, particularly after 2020. Firms based in China were the largest recipients throughout the period, typically accounting for half or more of global subsidy outlays in the sector each year. OECD-based firms also experienced an increase after 2020, contributing to the overall rise in support seen between 2021 and 2023. As a share of their annual revenue, Chinese producers remained the largest subsidy recipients throughout the period, followed by producers based in other emerging and developing economies. While having a much lower subsidy intensity – typically below 1% of sales revenue – firms based in the OECD experienced occasional spikes in support. This was the especially the case for firms based in North America in 2020 and 2023.

Although the production of glass, ceramics, and refractories is generally considered a heavy industry, the structure of its subsidies involves relatively more grants and tax concessions than below-market borrowings (BMB). This makes the sector somewhat different from other heavy industries, such as aluminium, steel, and shipbuilding. Tax concessions and grants saw notable spikes in 2020 and 2023 in both nominal and relative terms, some of which were tied to support for the production of advanced pharmaceutical glass products following the COVID-19 pandemic. In addition to the subsidies covered by the OECD MAGIC database, the sector may have also benefitted from subsidised energy inputs given how energy-intensive the production of glass, ceramics, and refractories can be. To the OECD’s knowledge, there are no estimates available for this type of support in this sector specifically.

Figure A A.14. Glass, ceramics, and refractories – Subsidies by instrument

Source: OECD MAGIC database.

Heavy machinery (MACH)

The heavy machinery sector in the OECD MAGIC database covers machinery and equipment used in construction, agriculture, and mining. This sector is diverse, with companies producing a wide range of products, including tractors, excavators, wheel loaders, backhoes, as well as different types of cranes (e.g. all-terrain cranes, truck cranes, crawler cranes, or port cranes). The industry has experienced significant growth in recent decades, underpinned by large-scale infrastructure drives associated with rapidly rising urbanisation and China’s real estate boom. Recent decades have also seen sizeable growth in demand for mining-related equipment emanating from countries’ growing needs for critical raw materials.

Major heavy machinery manufacturers have historically been based in OECD countries, mainly in the United States, Western Europe, Japan, and Korea. Several Chinese companies have, however, gained sizeable market shares in recent decades aided by growth in their domestic market. While not major exporters globally, there are also significant producers based in other emerging and developing economies such as India. Coverage of heavy machinery manufacturers in the OECD MAGIC database is estimated to cover at least half of global sales, although the OECD is not aware of a comprehensive, publicly available estimate of the size of the global market. Because the heavy machinery sector is the most recent addition to the database, work is ongoing to improve coverage further in future versions of the data.

Figure A A.15. Heavy machinery – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

Chinese manufacturers of heavy machinery have generally received larger subsidies than their OECD-based competitors, both in absolute and relative terms. This gap has been growing wider over time, but recently narrowed beginning with the onset of China’s real estate crisis in 2021. Meanwhile, subsidies for OECD-based producers jumped in 2020 due to support schemes tied to the COVID-19 pandemic and falling sales, which together caused an increase in the subsidy-to-revenue ratio.

The three types of subsidies covered by the OECD MAGIC database – namely, grants, income tax concessions, and below-market borrowings (BMB) – have all played an important role in supporting the heavy machinery sector between 2010 and 2024. While BMB seem to have been particularly prevalent in the early 2010s, they have since become more modest, leaving grants and tax concessions subsequently to account for most of the subsidies to the sector.

Figure A A.16. Heavy machinery – Subsidies by instrument

Source: OECD MAGIC database.

Semiconductors (SEMI)

The semiconductor industry plays a pivotal role in the modern economy, producing vital, enabling components for electronic devices ranging from smartphones and computers to cars, medical devices, and aerospace and defence systems. The global semiconductor market, which amounted in 2024 to USD 631 billion (World Semiconductor Trade Statistics, 2026[12]), is projected to grow further on the back of growth in data centres, artificial intelligence, and autonomous driving. The semiconductor sector typically covers three stages of the semiconductor value chain, namely: chip design; chip manufacturing in foundries; and semiconductor testing and packaging. Firms involved along the chain are either specialised in one of these steps or vertically integrated. Coverage of semiconductor firms in the OECD MAGIC database reflects this diversity but does not include more upstream companies such as those producing semiconductor manufacturing equipment (e.g. photolithography machines).

Firms based in the United States and Asia (e.g. Japan, Korea, and Chinese Taipei) have long been the key players in the semiconductor sector, with Asia’s role growing in importance as part of the supply chain was relocated there. Asia has, over the last two decades, become a global centre for chip manufacturing and trade, although the United States maintains an important role in high-value segments of the supply chain, including in chip design. The sample of firms covered by the OECD MAGIC database thus includes a relatively large number of firms based in Asia and the United States, as well as large actors based in Europe, which largely serve the automotive industry. The sample is estimated to cover between 64% to 83% of global sales, depending on the year and how the sector’s scope is defined.

Figure A A.17. Semiconductors – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

The semiconductor sector has seen substantial increases in subsidies since 2016, with the steepest growth occurring after 2020. In absolute terms, firms based in the United States were the largest beneficiaries of government support, which notably includes the support these firms received in other jurisdictions in which they operate (e.g. in Asia), as well as the introduction of new subsidy programmes in the United States. Subsidies to firms based in the OECD Asia-Pacific region also expanded steadily throughout the period for similar reasons. While subsidies to semiconductor manufacturers based in China have been modest in absolute terms, they represented a significant amount relative to their sales, reaching close to 10% of revenue in the early 2020s. This reflects China’s longstanding support for its semiconductor industry, which received new impetus following the adoption by the State Council in 2014 of the Guideline for the Promotion of the Development of the National Integrated Circuit Industry and growing restrictions imposed on exports of semiconductor technology by trading partners beginning in 2018.

Tax concessions are the largest instrument supporting the sector and have seen a noticeable rise since 2020. This reflects a mixture of longstanding tax support for R&D spending and investment incentives taking the form of tax holidays, preferential rates of tax, and investment tax credits for promoting new semiconductor manufacturing capacity. Grants have increased as well, but continue to represent a smaller portion of all subsidies. The presence of below‑market borrowings (BMB) in the sector is, however, marginal as the semiconductor industry tends to rely relatively more on equity financing and bonds than bank loans. That said, BMB were relatively more meaningful in the specific case of Chinese firms, which have benefitted from preferential lending from policy banks and state banks. Although the OECD MAGIC database does not yet cover support to semiconductor firms taking the form of government equity provided on non-market terms, such support has been important in the semiconductor industry (OECD, 2019[7]; OECD, 2021[5]).

Figure A A.18. Semiconductors – Subsidies by instrument

Source: OECD MAGIC database.

Shipbuilding (SHIP)

Although it is generally considered a heavy industry, shipbuilding sits downstream in industrial supply chains, with global maritime shipping companies being the main clients for the commercial vessels produced by shipyards. The sector notably relies heavily on steel, the production of which is also covered in the OECD MAGIC database. Shipbuilding in the database concentrates predominantly on the construction of large civilian vessels, thus excluding naval (military) shipbuilding where possible.4 This primarily includes container ships, tankers (e.g. for oil), LNG carriers (for liquefied natural gas), bulkers (e.g. for iron ore, steel, and grain), and large passenger ships (e.g. cruise ships).

Figure A A.19. Shipbuilding – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

The shipbuilding sector has seen major changes in market shares over the period 2005‑24, with China having become the largest supplier by far, measured by global commercial ship deliveries in compensated gross tonnage. China’s share of global commercial ship deliveries thus grew from 19% in 2005 to 51% in 2024 while the combined share of Japan and Korea decreased from 59% to 38% and Europe’s fell from 15% to 5%.5 As many shipbuilders are part of broader industrial conglomerates spanning multiple sectors, there are limits to the entities the OECD MAGIC database can cover, particularly where reported business segments do not single out shipbuilding. That said, the firms covered in the OECD MAGIC database represented about 60% of the global shipbuilding capacity estimated by shipping consultancy Clarksons in 2023‑24.

Chinese shipyards generally received larger subsidies than their OECD competitors over the period 2010‑24 covered in the OECD MAGIC database. There were, however, two noticeable spikes in the subsidies received by OECD-based shipyards around 2016‑17 and in 2020. The former instance was in relation to the rescue of Korean shipyards facing financial distress in 2016 and the latter was due to emergency loans provided to some European shipyards during the COVID‑19 pandemic. Support for Chinese shipyards has been relatively more sustained, albeit at a reduced rate starting around 2016.

Grants and below-market borrowings (BMB) have been the main two instruments that governments have used to support the shipbuilding industry between 2010 and 2024. Corporate tax concessions were, for their part, relatively minor, accounting for a much smaller proportion of the total support. While the amount of grants provided has been relatively stable over the years, BMB appear to have responded partly to shipyards’ financial distress, consistent with governments’ more frequent use of BMB in emergency situations. Besides these three types of subsidies, shipbuilding is also characterised by large government ownership of shipyards, with as much as 65% of sales revenue in the sector coming from firms which are at least 25% owned by governments in China and OECD Member countries. Widespread government ownership in shipbuilding creates not only the potential for support provided through the equity channel, but also alludes to the possible existence of an ecosystem of government support along the value chain given the presence of subsidised state-owned steelmakers upstream and the involvement downstream of state-owned shipping companies ordering commercial vessels.

Figure A A.20. Shipbuilding – Subsidies by instrument

Source: OECD MAGIC database.

Solar photovoltaic cells and modules (SOLA)

Solar photovoltaic energy has the been the fastest growing source of renewable energy in recent times, enabled by the rapid scaling of manufacturing capacity for producing solar cells and modules. The sector has received widespread support from governments over the years for reasons ranging from countries’ desire to decarbonise power generation to energy security, job creation, and innovation. While the sector in the OECD MAGIC database largely concentrates on the production of downstream solar cells and modules, it also covers the production of upstream solar-grade polysilicon and wafers where companies are vertically integrated.

The solar panel industry has undergone massive shifts in the location of production over the past two decades. In 2024, Chinese module producers accounted for more than 90% of global shipments by volume, while OECD-based producers (e.g. based in Germany, Japan, and the United States) saw their combined global share fall below 10%, down from 80% in 2005. This shift has been accompanied by an unprecedented increase in global production capacity, which in 2024 represented more than twice the level of global demand. The OECD MAGIC database aims to reflect these changes, with its firm sample accounting for an estimated 67% of global solar module shipments in 2024 according to industry sources.

Figure A A.21. Solar photovoltaic cells and modules – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

While Chinese producers of solar cells and modules have traditionally received larger subsidies than their OECD-based competitors, the years 2023‑24 saw government support increase dramatically in the OECD on the back of new government policies, including measures aimed at supporting reshoring of the solar value chain. In absolute value, Chinese producers continue, however, to receive larger subsidies due to their considerably larger size and scale of production. That said, Chinese producers did experience, in 2024, a marked decrease in support as persistent supply-demand imbalances in the solar panel industry led to falling revenue, sizable losses, and job cuts.

Grants, tax concessions, and below-market borrowings (BMB) have all been used by governments aiming to support solar panel producers, including in the form of investment tax credits, preferential rates of tax, and subsidised loans from policy banks and state banks. Grants notably saw a large increase in 2023‑24 following the introduction of specific schemes in OECD Member countries awarding producers refundable and exchangeable tax credits counted as grants by companies in their accounting reports. Grants were also higher in China over the course of 2023‑24 even as the losses incurred by Chinese producers resulted in lower levels of tax concessions and BMB.6 There are also potentially other forms of subsidies benefitting the sector, which are not captured in the OECD MAGIC database. These might include, for example, injections of government equity into lossmaking companies, preferential electricity tariffs for producers of energy-intensive polysilicon, and availability of land at below-market prices.

Figure A A.22. Solar photovoltaic cells and modules – Subsidies by instrument

Source: OECD MAGIC database.

Steel (STEE)

Steel plays an important role in the production of capital goods, buildings, infrastructure projects, consumer goods (e.g. appliances), and transportation equipment (e.g. automobiles and shipbuilding). In the OECD MAGIC database, the sector covers steel produced in integrated plants, which use blast furnaces for ironmaking and basic oxygen furnaces for steel, and that produced in electric arc furnaces. It does not include iron-ore mining, unless the companies included in the database are vertically integrated. Coverage includes the value chain downstream of mining, namely: the smelting and processing of iron ore into steel; semi-finished steel such as ingots, billets, blooms and slabs, hot-rolled products such as coils and plates; and products that are processed further into cold-finished products, such as cold-rolled coils, plates, tubes, wires, and unworked castings and forgings.

Steelmakers covered in the OECD MAGIC database represent about 60% of global steel revenue according to Factset data. The largest players in the sector are based in China, India, and the OECD, though there are several key companies based in other emerging and developing economies (e.g. Russia and Viet Nam). Collectively, Chinese firms have gained significant market shares in the last two decades, accounting in 2024 for 47% of global steelmaking capacity and 49% of the total steel revenue covered in the OECD MAGIC database. Many of these companies are state-owned, including some of the largest ones.

Figure A A.23. Steel – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

Steelmakers based in China received considerably larger subsidies than steelmakers based elsewhere throughout the period 2010‑24, both in absolute and relative terms. Subsidies peaked in 2015 when China experienced stock market turbulence and metal producers faced the lowest prices seen over the period covered. Subsidies subsequently increased again with the onset of China’s real estate crisis in 2021, which triggered a fall in profitability and revenue for steelmakers globally. Lower revenue and larger amounts of subsidies together resulted in a significantly higher subsidy-to-revenue ratio in 2024, at around 4% for China.

Figure A A.24. Steel – Subsidies by instrument

Source: OECD MAGIC database.

Below-market borrowings (BMB) accounted for most of the subsidies in the sector. This partly reflects the greater reliance of steelmakers on debt financing – given the capital-intensive nature of steel mills – as well as these companies’ weaker financial standing. Support in the form of BMB has tended to ramp up in time of crises suggesting that these subsidies often act in a countercyclical fashion, helping distressed companies to stay afloat. While they appear more modest, government grants and income tax concessions are not insignificant either. Grants have notably increased in absolute terms since 2015, with the amount doubling over the period 2015‑24. While the OECD MAGIC database does not cover the direct provision of subsidised energy inputs to companies, evidence for an illustrative sample of steelmakers has shown these to be important as well (OECD, 2023[11]).

Telecommunications network equipment (TELC)

The telecommunications network equipment sector plays a crucial role in the modern global economy, connecting people, businesses, and governments and enabling the flow of information in real-time. The sector encompasses global companies producing the devices and software behind network infrastructure, which utilise various technologies such as wired, wireless, fibre, and satellite systems (including 5G technology). It is one of the most technologically sophisticated industrial sectors in the OECD MAGIC database, with change occurring at a rapid pace, underpinned by sizable investments in R&D.

The global telecommunications network equipment sector is highly concentrated, with a small number of firms accounting for the vast majority of economic activity. Coverage in the OECD MAGIC database is near-universal, capturing an estimated 80% of global sector revenue according to industry sources. The leading firms are headquartered primarily in China and OECD Member countries. Since 2005, Chinese companies have significantly expanded their global market share, increasingly competing with—and in some segments displacing—OECD-based firms. Compared with other sectors covered in the database, telecommunications network equipment is characterised by a higher prevalence of privately-owned firms.

Figure A A.25. Telecommunications network equipment – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

Telecommunications network equipment companies based in China generally received larger subsidies relative to their revenue than companies based in the OECD over the period 2010‑24, although the difference is generally smaller compared with other industrial sectors covered in the OECD MAGIC database. There was, nevertheless, a marked decrease in the relative value of the subsidies received by China-based firms in 2016. This decrease stemmed mainly from lower tax concessions and arose due to some companies earning lower taxable income amid a generally poor financial performance. Changes in these companies’ indebtedness also affected their below-market borrowings (BMB). Subsidies were initially larger in absolute terms for OECD-based companies but have since fallen, both in absolute terms and relative to revenue. Subsidies benefitting China-based firms have been growing meanwhile since 2020.

As a technology- and intangibles-intensive activity, the production of telecommunications network equipment relies predominantly on equity as a source of financing, which leaves relatively little scope for subsidies taking the form of BMB. Instead, subsidies to the sector comprise chiefly grants and income tax concessions, many of which are directed at stimulating R&D and innovation. While income tax concessions were large in the early 2010s, they have since decreased both in absolute and relative terms, even as grants became considerably larger, accounting in recent years for most of the support to the sector. Beyond the subsidies covered in the OECD MAGIC database, the importance of public procurement for the sector may lead to other forms of government support such as market-access restrictions and discriminatory practices, which, like subsidies, can also distort markets and help firms gain market shares (OECD, 2024[6]).

Figure A A.26. Telecommunications network equipment – Subsidies by instrument

Source: OECD MAGIC database.

Rolling stock and signalling (TRAN)

Rolling stock refers to the range of vehicles used for the transportation of passengers and freight by rail. It includes all powered (e.g. locomotives) and unpowered vehicles (e.g. passenger carriages or coaches and freight wagons). The sector is broad and diverse as it includes the manufacture of passenger trains, freight trains, high-speed trains, light rail vehicles (e.g. trams), metro vehicles, and automated systems (e.g. monorails). The rolling stock and signalling sector is a subset of the broader rail supply industry, which also comprises the provision of rail infrastructure such as tracks and electrification and dedicated services such as the repair and maintenance of rolling stock.

Firms covered in the OECD MAGIC database account for about 75% of the global rolling stock and signalling market according to industry estimates (UNIFE, 2024[13]). The sample includes more than 20 companies producing vehicles for the transportation of passengers and freight, as well as signalling and communication equipment. While some firms manufacture and sell vehicles in one product segment only, others are more diversified and can be involved at different stages of a rail project, including the provision of equipment (i.e. rolling stock), signalling and communication systems, and services (e.g. reparation and maintenance services). Many of the largest firms are based in Europe, Japan, and Korea, although companies with the highest sales globally are based in China. Firms located in North America today produce vehicles mainly designed for freight transportation.

Figure A A.27. Rolling stock and signalling – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

Figure A A.28. Rolling stock and signalling – Subsidies by instrument

Source: OECD MAGIC database.

China-based producers of rolling stock and signalling equipment were by far the largest beneficiaries of subsidies – both in absolute and relative terms – compared with firms based in the OECD between 2010 and 2024. These subsidies have also grown considerably beginning in the mid-2010s. Support for OECD-based firms was, meanwhile, much more modest despite occasional spikes in subsidies, notably following the introduction of one-off wage subsidies and tax relief during the COVID-19 pandemic.

Income-tax concessions (including support for R&D and preferential rates of tax) and grants were the largest subsidy instruments employed in the sector globally. Below-market borrowings (BMB) were, for their part, relatively modest for the overall sample of firms, although this form of support did feature prominently in the case of firms based in China. Beyond the subsidies covered in the OECD MAGIC database, the importance of public procurement for the sector may lead to other forms of government support such as market-access restrictions and discriminatory practices, which, like subsidies, can also distort markets and help firms gain market shares (OECD, 2024[6]).

Wind turbines (WIND)

Wind energy was the second fastest growing form of renewable energy in 2024, behind solar photovoltaic energy. The wind turbine manufacturing sector has enabled this growth by designing, manufacturing, erecting, and maintaining wind turbines and their associated equipment. While wind turbines are composed of approximately 25 000 individual parts, the final product is made up of five major components, namely, the blades, the tower, the nacelle, the rotor, and the turbine foundations. Most of the largest wind turbine manufacturers are vertically integrated, producing in-house some of these components, such as the nacelles and, to a lesser extent, the blades. While specific raw materials such as certain rare-earth elements (e.g. neodymium, dysprosium and – albeit in relatively smaller amounts – praseodymium) can form critical upstream inputs into the production of turbine components (e.g. permanent magnets for offshore turbines), the sample covered by the OECD MAGIC database does not include the production of these upstream materials.

Figure A A.29. Wind turbines – Subsidies by firms’ headquarters location

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

Source: OECD MAGIC database.

Firms covered in the OECD MAGIC database represent about 75% of global sales of wind turbines. The largest are headquartered in China, Europe, and the United States. In the last 15 years, the wind turbine sector has notably seen Chinese producers play a growing role both at home and abroad. As of 2025, more than half of the top 15 wind turbines manufacturers in terms of capacity additions were Chinese according to BloombergNEF. On top of benefitting from a sizeable home market, Chinese exports of wind turbines have grown steadily since 2010 (OECD, 2025[14]).

While firms based in China have generally received larger subsidies than OECD-based firms, the difference is more striking when expressing subsidies relative to firms’ sales revenue. OECD-based firms have seen an uptick in the subsidies they received since 2023 on account of new subsidy schemes supporting the domestic production of wind turbines. This increase was, however, more modest compared with the recent increase in the subsidies received by manufacturers of solar panels. Despite the recent uptick in support for OECD-based producers of wind turbines, China-based manufacturers continued to be the largest recipients of subsidies in 2023 and 2024, both in nominal terms and as a percentage of their annual revenue.

All three types of subsidy instruments covered in the OECD MAGIC database – namely grants, tax concessions, and below-market borrowings (BMB) – featured prominently in the sector. Income-tax concessions and BMB were generally larger – both in nominal and relative terms – until 2023, when new grant programmes were introduced to support the production of renewable energy equipment in China and OECD Member countries.

Figure A A.30. Wind turbines – Subsidies by instrument

Source: OECD MAGIC database.

Notes

← 1.  Historical data on primary aluminium production by region come from the International Aluminium Institute’s website. See https://international-aluminium.org/ (accessed on 13 April 2026).

← 2.  It typically takes about 12‑16 kWh of electricity to produce one kg of primary aluminium, with electricity alone accounting for 30%-40% of the costs of aluminium smelting.

← 3.  See, for example, https://pubs.usgs.gov/periodicals/mcs2025/mcs2025-cement.pdf (accessed on 21 April 2026).

← 4.  Many large companies combine commercial and naval shipyards, which makes it impossible to operate a clear separation.

← 5.  Historical data on global commercial ship deliveries by geographical grouping are based on OECD calculations using Clarksons Research Services, World Fleet Register (2026).

← 6.  This is likely because losses imply that companies have no taxable income against which to apply special deductions and reduced rates of tax. Financial losses similarly degrade the risk profile of companies, which can make banks less inclined to lend to them at low rates.