Shanghai Government Announces Action Plan for Economic Recovery

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

The plan includes 50 specific policies and measures across eight different aspects. The main contents can be roughly divided into four sections: providing financial relief for enterprises, resuming work and production, stabilizing foreign investment and trade to promote consumption, and strengthening support and guarantees.

The plan also includes vows of greater financial relief for COVID-hit industries, the form of tax cuts, fee reductions, and extending rent relief.

Resumption of work, businesses and market activity are issues of great concern to all kinds of firms at present. The city’s approval system for production resumption will be abandoned starting June 1. At the same time, the city will promote work resumption in all sectors by expanding the scope of subsidies for enterprises’ pandemic prevention and disinfection, stabilizing industrial and supply chains in the Yangtze River Delta, and smoothing domestic and international logistics and transportation channels.

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In terms of promoting consumption, the city will gradually reduce the purchase tax on some passenger vehicles as required by national policies. It will also provide 10,000 yuan ($1,501) subsidies to consumers who replace cars with pure electric ones, and it will support large commercial enterprises and e-commerce platforms in issuing consumption coupons.

Focusing on capital, land, market talent and the wider business environment, the Shanghai government has put forward a number of policies to provide support and will introduce more measures in the future.

The plan also proposes a 600 yuan/head subsidy for the hardest-hit businesses that didn’t lay off workers, covering fields like catering, retail, tourism, transportation, sports and entertainment, accommodation, exhibitions and more. The maximum subsidy for each enterprise will not exceed 3 million yuan.