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Shanghai unveils economic support measures as lockdowns ease

The financial hub will accelerate approvals for property projects and supply new residential developments, according to a plan issued by the Shanghai municipal government.

May 30, 2022 / 06:48 AM IST
China’s export growth tumbled in April as global demand weakened, adding to pressure on the world’s second-largest economy. Exports rose 3.7 percent over a year earlier to $273.6 billion, down sharply from March’s 15.7 percent growth, customs data showed on May 9. Reflecting weak Chinese demand, imports crept up 0.7 percent to $222.5 billion, in line with the previous month’s growth below 1 percent. (Image: AFP)

China’s export growth tumbled in April as global demand weakened, adding to pressure on the world’s second-largest economy. Exports rose 3.7 percent over a year earlier to $273.6 billion, down sharply from March’s 15.7 percent growth, customs data showed on May 9. Reflecting weak Chinese demand, imports crept up 0.7 percent to $222.5 billion, in line with the previous month’s growth below 1 percent. (Image: AFP)


Shanghai offered tax rebates for companies and allowed all manufacturers to resume operations from June as authorities rolled out scores of policies to revitalize an economy impacted by Covid lockdowns.


The financial hub will accelerate approvals for property projects and supply new residential developments, according to a plan issued by the Shanghai municipal government. The quota for car ownership this year will be increased by 40,000, a purchase tax for some passenger vehicles will be reduced and subsidies will be given to electric car buyers.


The measures were part of 50 measures in eight categories aimed at stabilizing the city’s economy after the current Covid outbreak hurt economic and social development. Companies in Shanghai will no longer need to be on a “whitelist” to resume production starting from June 1, Vice Mayor Wu Qing said at a briefing on Sunday.


China’s dogged adherence to its Covid Zero policy at all costs -- epitomized by Shanghai’s lockdown that began in late March and restrictions imposed elsewhere in the country of 1.4 billion -- has slowed everything from consumer spending to manufacturing in the world’s second-largest economy. Industrial output and consumer spending slid to the worst levels in April since the pandemic began in early 2020, while the confinement has sparked clashes between residents and police.


Shanghai will loosen Covid test requirements for people who enter public places from June 1 as the city tries to restore a sense of normalcy after a two-month lockdown of its 25 million population. It reported 122 new local Covid cases for Saturday, a decline from the 170 for Friday. Only one positive case was found outside government quarantine.

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Capital Beijing eased mobility curbs in several districts after authorities said its outbreak was under control. The city reported 21 new cases on Sunday, declining for the seventh straight day.


Other measures in Shanghai’s newly published plan include:


  • More tax, fee cuts for companies; reducing rents for more firms

  • Encouraging commerce firms and e-commerce platforms to issue coupons to boost consumption

  • Supporting construction of infrastructure projects in railway, airport hubs, ports and energy sectors; accelerating implementation of major projects in integrated circuits and new energy vehicles

  • Boosting financial support to foreign trade firms

  • Helping foreign companies resume operations and supporting multinational companies to establish regional headquarters and research centers in Shanghai

  • Starting more urban renovation projects and supporting local government to sell special bonds for city renovation projects

  • Properly increasing construction land quota for 2022

The new measures -- in place till end-2022 -- together with policies issued in March, will reduce the burden for entities by 300 billion yuan ($44.8 billion) this year, Hua Yuan, head of Shanghai Municipal Development & Reform Commission, said at the briefing.

Bloomberg
first published: May 30, 2022 06:48 am
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