Transactions do not occur in vacuo. Your question must take into account who is buying, who is selling, and what the alternatives are for both parties.

If the government is offering a loan at 1% it's probably because it's a better option than offering a loan at 3% and losing the partner who would otherwise be a net positive for the country.

I doubt buricrats are capable of regularly making that choice correctly. Remember communism failed in large part because central planning is hard.

Further, if a company's option is to fail or give up 90% of it's stock it's going to give up 90% of it's stock. The idea the government needs to give great terms to a failed company is simply corruption talking.

Not sure why communism was brought into this, but your repetition of that common trope is misinformed. A planned economy theoretically works just fine as long as external adversaries aren't manipulating the global market to your detriment, deliberately excluding you from global bank dealings, and aren't putting a bunch of pressure on you to develop a massive military budget overhead. Without these influences, the inherent cost in running a communist economy is lower than a capitalist one. Why do you think communism was villified so much pre-Stalin? (During and post-Stalin the USSR got a lot of flak, and rightly so, for breaking up citizen collectives and killing millions of its citizens.)

Also not sure where the "failed business" idea came in here. It seems like you're just swinging your sword at the closest straw men.

It just a loan if the business is fine. It's only a bail out if they are sinking.

I don't mean communism failed because of central economic planning. But, China is a great example of how totalitarianism can survive, but central planning is hard.

If it makes you feel better I can point to plenty of US examples. Central planning seems like a good idea, but it's really harder than most assume.