Ghost factories could be China’s new growth driver

economictimes.indiatimes.com:

Industrial equipment used to make semiconductors, solar cells and electric vehicles presents a great way for corporate executives, bank managers and government bureaucrats to keep the wheels turning even as consumers balk at spending money and foreign buyers cut purchases of Chinese exports. The US-China tech cold war and continuing trade tensions serve as the perfect excuse to rack up expenditures that can support local businesses, keep people employed, and add to the economy. Only one line item in China’s industrial output figures, out of almost two dozen, consistently posted double-digit growth figures in recent months.

Electrical machinery and equipment manufacturing climbed 17% in April, 15% in May and the same again last month. Everything else, including auto manufacturing, metal smelting, and textiles, grew either by single-digits or dropped. Take Naura Technology Group Co.

and Advanced Micro-Fabrication Equipment Inc., producers of equipment used in electronics and chip manufacturing. The former posted first-half revenue growth of around 54% to 8.4 billion yuan ($1.2 billion) and the latter 28% to 2.53 billion yuan. By comparison, China’s economy climbed 5.5% for the six months to June 30.

That gross domestic product growth figure includes a disappointing 6.3% for the second quarter, a period that benefited from a low base a year earlier when swathes of the country were in Covid-related lockdowns. Nationwide, production of industrial-control computers and systems, crucial to running high-tech factories, climbed 34.1% in the first half, one of the strongest contributors to growth for the period. Companies like Naura and AMEC benefit from a US-led halt on selling chipmaking equipment to China, as well as President