BEIJING — Chinese industry has been operating under distinctly unfavorable external conditions, with trade tensions, the pandemic, geopolitical conflicts, and the reconfiguration of global supply chains all exerting pressure on manufacturing. Yet China’s net goods exports have continued to grow and now exceed $1 trillion, with electric vehicles (EVs), batteries, and machinery expanding their global footprint. Why have external headwinds not weakened China’s manufacturing competitiveness? A popular explanation points to subsidies, even though the support that Chinese firms receive from direct subsidies is not significantly greater than in other major economies. Because direct subsidies alone cannot sustain this explanation, some recent studies have looked for more implicit forms of support, such as “below-market borrowings” (BMBs), which might show up as a gap between corporate borrowing rates and selected benchmark rates. Yet this argument also has problems, because much depends on how the benchmark is chosen. When assessing advanced economies, these studies often use funding