Shanghai authorities pledged on Sunday to allow all businesses to open from Wednesday. The city’s deputy mayor, Wu Qing, announced the easing of restrictions at a press conference, alongside a series of 50 new measures taken to revive the city’s struggling economy.
From June 1, companies will no longer need a so-called “white list” approval to have employees working on site. However, those who wish to go to work will still have to present a negative Covid test 72 hours before taking public transport.
On Sunday, authorities said they would work to relax the “unreasonable” Covid rules. The government also plans to offer tax breaks and rental assistance to businesses, as well as support for some construction projects.
China’s economy has been hit hard by the pandemic and the government’s “zero Covid” approach, forcing analysts to lower their growth forecasts for the year.
UBS last week lowered its GDP estimate for 2022 to 3%, well below China’s official target of 5.5%.
“The continued restrictions and lack of clarity on an exit strategy from current Covid policy are likely to weaken business and consumer confidence and hamper the release of pent-up demand,” the bank’s economists wrote in a report. .
Eric Zheng, president of the American Chamber of Commerce in Shanghai, said while he welcomed the city’s new measures, they had not allayed his concerns.
“For American businesses, the number one priority is to resume normal operations as soon as possible,” he told CNN Business.
“[But] too often, sub-district and even ward officials have prevented or slowed the resumption of business activities by imposing excessive red tape. »
Investors across the region appeared to welcome the news on Monday.
The reaction is “a clear sign that the light at the end of the Covid lockdown…has become a bit brighter,” Stephen Innes, managing partner at SPI Asset Management, told CNN Business.
“The lukewarm response to mainland equities suggests there may be a need for a broader economic reopening,” Innes said.
——CNN’s Shawn Deng, Elizabeth Yee and Lauren Lau contributed to this report.