SOE profits are used as slush fund.

Their currency doesn't float on the market. Strict capital controls are a hidden tax on exports. Imports are then tariff-ed to balance their sheet. It's an alternative taxation method if you cannot establish a compliant citizenry around your tax system.

> How's the CCP financing the subsidies?

CCP is as a matter of fact the largest VC in China.

Interesting trivia: BOE was considered the most successful example of municipal government VC by Hefei and Chengdu. Hefei bet on both plasma display and LCD, only BOE survived.