Giving more subsidies to the SOE´s is another example of the chinese government not moving towards more of a market-driven, less state-intervention, economy. They need to become more efficient and productive. Otherwise, they will indefinetly stay an export-dependent economy, that is, until they become too expensive to export. Then what?
The accusation about subsidies to the SOE by the West is often overblown, hypocritical or false, like those that say Chinese government subsidizes Huawei hugely. The US and other western countries also regularly subsidize its own companies; it's just they sometimes do it in different industries or in different ways. For example, the US has always subsidized Boeing through large defense contracts, while Europe subsidizes more directly to Airbus when it started and afterward.
Support or subsidy to SOE or private companies, if done strategically and selectively, has its societal benefits, above and beyond just profits. It is often done to correct the failure of the market or when maximizing profit is not the right or the only objective. For example, infrastructure funding is done very differently in China from that in the US. Another example is how Chinese government cultivates and promotes the EV market in China, which has profound impact on the industry and market. Chinese policies and subsidies have played huge role in getting them off the ground. Now many governments around the world are following China's example. For strategic industry such as semiconductor, which has national security implications, subsidies are necessary - I assume you don't need me to review the US sanctions against China in this industry.
In the end, if industrial policies or subsidies are not successful, they'll simply drain resources from the economy and become unsustainable. The fact that Chinese government has been strategically and selectively doing them and, more importantly, that the US and other western governments are strongly against them are clearly proof positive that they're good policies and working. The US is now clearly, unmistakably learning from China and moving closer to Chinese model. Whether it can out-China China is yet to be seen.
