(CBN Global) March 22 -- In the past five years not a single vehicle has rolled off the production line at Henan Suda Electric Vehicle Technology Ltd., a CNY5 billion (USD770 million) project to make electric cars, sources told CBN.
Based in Sanmenxia, a city in the central Chinese province of Henan, Suda Electric last year said it would generate direct and indirect economic benefits worth billions of yuan once its production facilities were completed. Even after wasting a significant amount of public resources, the firm is still solvent.
Suda Electric has the characteristics of a typical 'zombie company,' using local government assets to support itself while squandering public resources, said Mr. Jiang Changyun, a researcher from the Institute of Industrial and Technological Economics of the National Development and Reform Commission.
In addition to CNY20 million in research and development funding the project secured from the province, it got CNY100 million from the municipal finance department. The local government has prioritized the project, giving Suda Electric the land it needs despite a shortage. Phase one of the project requires 705 acres, and the company received the provincial government's approval in just 20 days.