Authorities in Shanghai on Sunday promised to allow all businesses to open from Wednesday. Deputy Mayor Wu Qing announced the easing of restrictions at a news conference, along with a number of 50 new measures being taken to revive the city’s battered economy.
From 1 June, companies will no longer need the approval of the so-called “white list” to have employees working on site. However, those wishing to go to work will still need to submit a negative Covid test 72 hours before taking public transport.
Authorities said Sunday they would work to ease Covid’s “unreasonable” rules. The government also plans to offer tax breaks and business rental assistance, as well as support for some construction projects.
The worries remain
China’s economy has been hit hard by the zero-covid pandemic and government approach, forcing analysts to lower their growth forecasts for the year.
Last week, UBS lowered its GDP estimate for 2022 to 3%, well below China’s official target of 5.5%.
“Prolonged constraints and a lack of clarity about Covid’s current exit strategy are likely to reduce corporate and consumer confidence and prevent the release of accumulated demand,” the bank’s economists wrote in a report.
Eric Zhen, president of the American Chamber of Commerce in Shanghai, said that while he welcomed the city’s new measures, they did not alleviate all his worries.
“The number one priority for American business is to resume operations as soon as possible,” he told CNN Business.
“[But] all too often, sub-district and even neighborhood staff have prevented or delayed the resumption of business operations by imposing excessive bureaucracy. “
Investors across the region seem to have welcomed the news on Monday.
The response is “a clear indication that the light at the end of the Covid blockade … has become a little brighter,” Stephen Ines, managing partner at SPI Asset Management, told CNN Business.
“The young response to the continent’s securities suggests that wider economic opening may be needed,” Ines said.
-— Sean Deng, Elizabeth Yee and Lauren Lau of CNN contributed to this report.