Those reasons sound retarded. Having a loss leader product or line just means you are recouping it elsewhere. It’s a draw-in, like $1.25 hotdogs at Costco. It’s different than if your whole business operates at a loss for a certain time in order to squeeze out competition. The only way this would make even marginally sense is if say both IKEA and JYSK had a cafeteria and IKEA decided to sell food at a loss while JYSK would not be able to afford in that segment.
From what I know, it’s not actually China subsidizing shipping, but the individual target countries instead, mostly on taxpayer money. This wouldn’t be bad in practice, except that goods not originating from China do not have subsidized shipping, thus the unfair advantage.