Wouldn’t any form of government funding produce a lazy company vs companies standing on their own two feet with the free market acting as drill sergeant?
Suppose you have to do some R&D in order to make something happen. There is no way to keep it a secret and China isn't going to enforce a patent on it, so if you pay to do the R&D and then have to charge prices high enough to recover it, they undercut you on price and you go out of business. But if the government covers the R&D then you can do domestic production at a competitive price.
Meanwhile the subsidy should be going to every company in the industry so then they still have to compete with each other.
Or to put it a different way, what's really the difference between a subsidy and a tax cut?
