They force the government to levy taxes and tariffs and ban competition to protect their established non-competitive products and profit margins.

Even if we put aside that Chinese manufacturers produce often under slave-like conditions, the vast majority of companies are not fit for market without massive state subsidies and additional support that are much higher than anything in West.

A good way to observe this is, for example, when we compare Chinese and Western car manufacturers which are producing within China. Even in the country, Chinese car firms receive a lot more direct state aid by all comparative standards. Between 2019 and 2002, Tesla's reported state aid was 2% of net income, and no grants since 2023 (European car markers' grants were even lower than Tesla's), while BYD’s subsidy income were 265 of net income in 2024 and 35% in 2025.

The gap between Western and Chinese producers is much larger if Western firms produce at home.

Another way Chinese carmakers lower costs: they 'outsource' costs to their suppliers. BYD has even created its own proprietary supply chain finance system called the “D-chain,” through which it issues “e-debt certificates" which means the company stands outside the law (there is a Negotiable Instruments Law in China in principle, but it doesn't matter to all companies). According to company reports for the years 2023 and 2024, BYD took an average of 155 days to pay suppliers, Geely 149 days, and Leapmotor even 225 days.

Western carmakers paid their suppliers much sooner - Tesla withing 60 days, Volkswagen in 43 days, and 41 for Toyota in 41 days.

Chinese companies also benefit from below-market borowings (below the China Prime Loan Rate), and they receive preferential access to cheap land to build their factories (especially if and when there are good connections to the party).

And this is a TINY sample of what happens. Comparing Western and Chinese subsidies doesn't make sense. It must clearly be said that under Western subsidy schemes, Chinese carmakers would have long been bankrupt.