Ghost factories could be China’s new growth driver

OVER the past four decades, Chinese policymakers at the central and local level have had a handy tool at the ready to boost economic activity when everything else faltered: construction. Spending money on new apartment blocks, transport infrastructure, energy-generation plants and industrial parks is a convenient way to pump-prime the economy. Now, there is a new mechanism for driving gross domestic product (GDP).

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.