On Sunday, the Shanghai authorities pledged to allow all businesses to open from Wednesday. The city’s deputy mayor Wu Qing announced the easing of restrictions at a press conference, along with a series of 50 new measures taken to revive the city’s battered economy.
From June 1, companies will no longer need so-called “white list” approval to have employees working on site. However, those wishing to get to work will still have to submit a negative Covid test 72 hours before taking public transport.
On Sunday, authorities said they will work to loosen Covid’s “unreasonable” rules. The government also plans to offer tax breaks and rental assistance to businesses and support for some construction projects.
The Chinese 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.
Last week, UBS downgraded its 2022 GDP estimate to 3%, far below the official Chinese target of 5.5%.
“The persistent restrictions and lack of clarity on an exit strategy from the current Covid policy will likely dampen business and consumer confidence and hinder the release of pent-up demand,” the bank’s economists wrote in a report.
Eric Zheng, president of the Shanghai US Chamber of Commerce, said that while he welcomed the city’s new measures, it didn’t alleviate all his concerns.
“For American companies, the number one priority is to resume normal operations as soon as possible,” he told CNN Business.
“[But] too often, sub-district and even neighborhood officials have prevented or slowed the resumption of commercial activities by imposing excessive bureaucracy. “
Investors across the region welcomed the news on Monday.
The reaction is “a clear signal that the light at the end of the Covid lockdown … has gotten a little brighter,” Stephen Innes, managing partner of SPI Asset Management, told CNN Business.
“The tepid response on mainland actions suggests that a broader economic reopening may be needed,” Innes said.
– CNN’s Shawn Deng, Elizabeth Yee and Lauren Lau contributed to this report.