Western countries subsidize our biggest companies. China subsidizes their small ones.

by Inside China Business [4-23-2024].

(RAD: This is a very important observation about some key reasons that China can quickly dominate critical technology segments. It is applied to thousands of companies in dozens of industries. His explanation is easy to understand, including examples showing the US approach vs the Chinese approach. Although not mentioned here, China follows up with their Five-Year Plans way into the future on what they want to accomplish and the critical resources needed. — RAD)

In the United States and Europe, the biggest companies most commonly benefit from subsidies and bailouts. The "too-big-to-fail" banks like JP Morgan and Bank of America and Citigroup, struggling automakers like GM and Stallantis, and even highly profitable companies like Intel and Taiwan Semiconductor are granted billions in subsidies, low-cost loans, and aid.

In contrast, China's industrial policy involves funding thousands of small companies that show high potential in certain key industrial fields. By identifying "little giants" and "single champions", Beijing's industrial policy is bottom-up.

They begin by studying industrial sectors, and looking for chokepoints, or bottlenecks, which may be exploited by foreign countries or companies, and identify companies in China that can spin up quickly to overcome them. They also identify Chinese companies that are successful in the domestic market, and which can dominate globally if given sufficient capital, research funding, partnerships, and access to China's overseas supply chains.

The Chinese economic, political, financial, and even educational systems are organized to support these strategies, and help to explain why Chinese companies can so quickly be organized to take market share, then entire supply and value chains, in global markets.

China Cultivates Thousands of ‘Little Giants’ in Aerospace, Telecom to Outdo U.S. [3-16-2023]

China positioning itself to dominate world’s copper supply [4-12-2021]

Bloomberg, China's dominance in critical minerals is a serious problem for the West [11-20-2023]