Editing Subsidy (section)

===Export subsidy===
An export subsidy is a support from the government for products that are exported, as a means of assisting the country's balance of payments.<ref name="Collins Dictionary" /> [[Usha Haley]] and [[George Haley]] identified the subsidies to manufacturing industry provided by the Chinese government and how they have altered trade patterns.<ref name="Haley and Haley 2013">{{cite news |last=Haley |first=U. |title=Subsidies to Chinese Industry |year=2013 |publisher=Oxford University Press |location=London |url=https://www.economist.com/news/finance-and-economics/21576680-new-book-lays-out-scale-chinas-industrial-subsidies-perverse-advantage |author2=G. Haley |newspaper=The Economist |access-date=2017-09-15 |archive-date=2017-06-16 |archive-url=https://web.archive.org/web/20170616162334/http://www.economist.com/news/finance-and-economics/21576680-new-book-lays-out-scale-chinas-industrial-subsidies-perverse-advantage |url-status=live }}</ref> Traditionally, economists have argued that subsidies benefit consumers but hurt the subsidizing countries. Haley and Haley provided data to show that over the decade after China joined the [[World Trade Organization]] industrial subsidies have helped give China an advantage in industries in which they previously enjoyed no comparative advantage such as the steel, glass, paper, auto parts, and solar industries.<ref name="Haley and Haley 2013"/> China's shores have also collapsed from overfishing and industrialization, which is why the Chinese government heavily subsidizes its fishermen, who sail the world in search of new grounds.<ref>{{Cite news|last=Urbina|first=Ian|date=11 August 2020|title=The deadly secret of China's invisible armada|work=NBC News|url=https://www.nbcnews.com/specials/china-illegal-fishing-fleet/index.html|url-status=live|access-date=19 February 2021|archive-date=19 February 2021|archive-url=https://web.archive.org/web/20210219095438/https://www.nbcnews.com/specials/china-illegal-fishing-fleet/index.html}}</ref>

Export subsidy is known for being abused. For example, some exporters substantially over declare the value of their goods so as to benefit more from the export subsidy. Another method is to export a batch of goods to a foreign country but the same goods will be re-imported by the same trader via a circuitous route and changing the product description so as to obscure their origin. Thus the trader benefits from the export subsidy without creating real trade value to the economy. Export subsidy as such can become a self-defeating and disruptive policy.

Adam Smith observed that special government subsidies enabled exporters to sell abroad at substantial ongoing losses. He did not regard that as a sound and sustainable policy. That was because "… under normal industrial-commercial conditions their own interests soon oblige loss-making businesses to deploy their capital in other ways – or to move into markets where the sales prices do cover the supply costs and yield ordinary profits. Like other mercantilist schemes and devices, export bounties are a means of trying to force business capital into channels it would not naturally enter. The schemes are invariably costly and damaging in various ways."<ref>Smith, Adam. ''The Wealth of Nations: A Translation into Modern English''. ISR/Google Books, 2019, page 300. ISBN 9780906321706</ref>