Shanghai announces action plan for economic recovery

To coordinate COVID-19 control with economic development, the municipal government of Shanghai on Sunday launched an action plan to speed up economic recovery.

Under the plan, composed of 50 policies and measures, the city's approval system for production resumption will be abandoned starting June 1, Shanghai's deputy mayor Wu Qing told a press conference.

At the same time, the city will promote work resumption in all sectors by expanding the scope of subsidies for enterprises' epidemic prevention and disinfection, stabilizing industrial and supply chains in the Yangtze River Delta, and smoothing domestic and international logistics and transportation channels.

The city will reduce rent, property tax and urban land use tax for qualified enterprises. It will also grant subsidies for non-resident users regarding water, electricity and natural gas fees.

According to the plan, measures will also be adopted to stabilize foreign capital, encourage consumption, and expand investment.

Shanghai will establish a mechanism to arrange designated personnel to aid work resumption of key foreign-funded enterprises and launch an online service system for major foreign-funded projects.

It will start the application process for special funds to develop the regional headquarters of multinational corporations in Shanghai ahead of schedule in 2022.

The city will gradually reduce the purchase tax on some passenger vehicles as required by national policies. It will also provide subsidies to consumers who replace cars with pure electric ones, and support large commercial enterprises and e-commerce platforms in issuing consumption coupons.

Shanghai also vows to promote the reconstruction of some old areas and support the scale expansion of corporate bond issuances to expand investment.

"The fundamentals of Shanghai's economic development have not changed, and the long-term positive trend of Shanghai's economy has not changed," said Wu Qing, adding that the municipal government would do everything possible to help market players and revitalize the city's economy.

Shen Kaiyan, expert with the Shanghai Academy of Social Sciences, said the action plan targets both the business sectors and residents, and includes many direct subsidies.

Promising investment prospects, high-level opening up, and a favorable business environment have made this metropolis an attractive destination for foreign investors.

In early March, the business hub with a population of about 25 million witnessed a new wave of infections caused by Omicron variants. By mid-April, daily infections had leaped from single digits to over 27,000.

Shanghai adhered to the dynamic zero-COVID approach to contain the fast spread, classifying the whole city into closed-off management areas, restrictive control areas and prevention areas.

On May 17, the city announced it had cut off the community transmission of COVID-19 in all its 16 districts.