Chinese battery manufacturer CATL leads the way in corporate subsidies, surpassing oil companies in China's ranking
In a significant move, Contemporary Amperex Technology (CATL) has emerged as the top recipient of state subsidies among all mainland listed companies in China, according to recent data. This shift in focus towards strategic tech sectors, including the electric vehicle (EV) industry, is becoming increasingly apparent.
CATL, a key player in the global EV battery market, received RMB 5.72 billion (USD 790 million) in subsidies in 2023, more than doubling the amount received the year before. This substantial support could intensify scrutiny of CATL's battery partnership with US automaker Ford, as questions about the nature and implications of state backing in the EV industry continue to be raised, particularly by the European Commission.
The oil and gas industry remains a vital part of the Chinese economy, with Sinopec and PetroChina still being major recipients of subsidies. However, the data suggests that the government is increasingly prioritizing sectors with higher growth potential, such as technology and EV manufacturing.
SAIC, China's biggest auto exporter, has also benefited from this shift. In 2023, the company sold 1.208 million units abroad, up 18.8% on the year. SAIC has been promoting its own EV brands and is "now under the process of transformation." The company received over RMB 4 billion (USD 552 million) in subsidies last year, making it one of the top recipients.
Another significant player in the EV market is Guangdong-based BYD, the country's leading EV maker and a key export engine, selling in over 50 overseas markets. BYD, a private EV maker backed by Warren Buffett's Berkshire Hathaway, received RMB 2.18 billion (USD 300 million) in subsidies in 2023, a 28% increase from the year before. Another EV maker, Great Wall Motor, also received over RMB 2 billion (USD 276 million) in subsidies last year.
The shift towards tech sectors and EV manufacturing is not a recent development. In 2021, SAIC Motor took the top position, overtaking Sinopec for the first time in five years. This move marked a significant change in the government's focus, with tech sectors becoming increasingly prioritized.
Without a comprehensive database for tracking government subsidies in China, corporate disclosures are one of the few ways to gauge how the state is allocating support to companies. This transparency is crucial for understanding the evolving landscape of China's economy and the strategic sectors that the government is supporting.
As the global focus on EVs and renewable energy continues to grow, it will be interesting to see how the Chinese government's subsidy strategy evolves and what impact it will have on the global EV market. The increasing subsidies for EV manufacturers in China could potentially lead to a surge in production and exports, further solidifying China's position as a major player in the global EV market.
