Shanghai Unleashes Raft of Measures to Support Regional Economic Recovery

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The Chinese financial hub of Shanghai has unveiled a raft of 50 measures to support the recovery of the local economy in the wake of strict Covid lockdown measures implemented at the start of April.

The Shanghai municipal government released the “Shanghai Municipal Action Plan for Accelerating Economic Recovery and Revival” (上海市加快经济恢复和重振行动方案) on 29 May.

The Plan covers eight areas and outlines a total of 50 measures. Starting from 1 June Shanghai will cancel the approval system for enterprises to resume work and operation, while also releasing a raft of policies that focus upon the stabilisation of foreign investment, spurring consumption and expanding investment.

With regard to stabilisation of foreign investment, Shanghai will establish specialist support mechanisms for the resumption of work and operation by foreign invested enterprises, while also launching an online services system for key foreign-invested projects.

Shanghai will accelerate application work for special funds to encourage multinational companies to develop their regional headquarters in the city, and further support multinational companies to establish both headquarters and R&D centres in Shanghai.

The Shanghai municipal government said that these measures are expected to “stabilise the expectations and confidence of foreign invested companies.”

On the consumption front Shanghai will increase the non-business passenger vehicle license quota by 40,000, as well as reduce purchase taxes for certain vehicles, and provide a one-time subsidy of 10,000 yuan to individual consumers who upgrade to electric vehicles.

Shanghai will support major trading enterprises and e-commerce platforms in the issuance of consumer discount vouchers, as well as “vigorously expedite the rapid recovery of consumption” and lend support to the development of the tourism and health sectors.

In terms of expanding investment, Shanghai said that in 2022 it will overhaul old districts within the centre of the city, and launch at least eight new urban village overhaul projects.

The municipal government will support the expansion of enterprise bond applications and issuance volumes, as well as include new infrastructure within the scope of support from special government bonds.