According to the Organisation for Economic Co-operation and Development (OECD) report, Chinese companies receive substantially higher levels of government support than firms in many other economies, including India. Between 2005 and 2024, Chinese firms received on average three to eight times more government support than firms based in the OECD. The report noted that these subsidies were also considerably higher than the support received by firms based in non-OECD economies such as Brazil, India, and Indonesia. Despite this significant disparity in subsidy support, the OECD highlighted that India is playing a growing role in global manufacturing and industrial supply chains. Recent developments show that Chinese appliance manufacturers Midea and Haier received more than $200 million annually in government subsidies between 2022 and 2024, while the Chinese government has implemented comprehensive demand-side policies including the 'Home Appliances Going to the Countryside' initiative launched in 2007 and appliance trade-in subsidies that boost domestic demand and enable firms to achieve economies of scale.
The OECD report highlighted India's growing role in the aerospace and defence industry, which has traditionally been dominated by companies from North America and Western Europe. China, India, Japan, and Korea have taken on a more important role in the aerospace global supply chain, first as innovation-driven component suppliers but also increasingly as OEMs themselves. This diversification is driven by rising demand across the Asia-Pacific region and Gulf countries, as reported by the OECD. The report noted that the aerospace and defence industry is becoming more diversified as demand rises across the Asia-Pacific region and Gulf countries, with these emerging economies gaining significant presence in the global supply chain. However, China's share of global aircraft engine exports has increased from about 1.5 percent to 2 percent between the late-2000s and recent years, while the United States' share has declined from over 13 percent to below 10 percent, as reported by the Center for Strategic and International Studies (CSIS). The Commercial Aircraft Corporation of China (COMAC) has received an estimated $49 billion in state subsidies and support mechanisms as of 2020, though it notably does not produce its own engines and instead relies on other firms.
The OECD noted that India has taken the lead as both global producers and consumers across many subsegments in industrial materials manufacturing since the 2000s. While companies based in Europe, Japan and the United States historically dominated industries such as glassmaking, advanced ceramics and high-performance refractories, the balance has shifted due to factors including a construction boom, lower production costs and changes in business strategies by companies in OECD economies. The report stated that 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 in industrial materials manufacturing. India was also identified as a significant producer in the heavy machinery sector, with the report noting that several Chinese firms have gained sizeable market share over recent decades while significant producers are based in emerging and developing economies such as India. However, China's semiconductor industry has grown more than four times faster than global demand between 2015 and 2023, with Chinese legacy chip production capacity growing more than four times faster than global demand, creating significant competitive pressure on global markets.
In the steel sector, the OECD report revealed that China remains the dominant force globally, accounting for 47% of global steelmaking capacity and 49% of total steel revenue covered in the OECD MAGIC database in 2024. Despite this dominance, the largest players are based in China, India and OECD countries, with the report suggesting that while China continues to benefit from substantially higher state support and larger market share in several industries, India is steadily strengthening its position across multiple sectors. The report emphasized that while China continues to benefit from substantially higher state support and larger market share in several industries, India is steadily strengthening its position in global manufacturing and industrial supply chains across multiple sectors. However, China's steel exports have grown significantly, with the country accounting for 47% of global steelmaking capacity and 49% of total steel revenue in 2024, as reported by the OECD, while China's share of global semiconductor manufacturing capacity increased by 20 percentage points between 2000 and 2025, while the United States saw its share decline by 8 percentage points.
Despite India's growing manufacturing role, the country faces significant competitive pressures from China's extensive subsidy programs. China's semiconductor firms sell chips at significantly lower prices than U.S. competitors can—often 30 to 50 percent cheaper, with Chinese manufacturers selling chips at times below production cost, enabling them to rapidly gain market share in third-country markets. China's semiconductor industry plans to invest over $150 billion by 2030, nearly three times the $52 billion invested by the United States in the CHIPS and Science Act in 2022, with the Chinese government investing $63.3 billion in the industry in the first half of 2025 alone. The report highlights that China's Made in China 2025 strategy aims for 70 percent self-sufficiency in semiconductor production and global leadership by 2030, while Chinese appliance manufacturers continue to benefit from demand-side subsidies including the 2024 program worth up to 15 percent of product sales price for energy-efficient appliances. These competitive dynamics underscore the importance of India's manufacturing growth while highlighting the challenges of maintaining competitiveness in global markets.
