by 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, along with a series of 50 new measures being taken to revive the city’s economy.
As of June 1, companies will no longer need the so-called “white list” to have employees working on site. However, those wishing to get to work will still be required to present a negative Covid test 72 hours before using public transport.
On Sunday, officials said they would work to ease Covid’s “irrational” rules. The government also plans to offer tax breaks and rental assistance to businesses and support some construction projects.
The worries remain
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.
Last week, UBS lowered its GDP estimate for 2022 to 3%, far below China’s official target of 5.5%.
“Persistent restrictions and lack of clarity on an exit strategy from the current Covid policy will likely dampen business and consumer confidence and prevent 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 that while he welcomed the city’s new measures, they did not alleviate all of his concerns.
“For American businesses, the number one priority is to resume normal operations as quickly as possible,” he told CNN Business.
“[But] all too often, sub-district and even neighborhood officials prevented or delayed the resumption of business operations by imposing excessive bureaucracy”.
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 gotten a little brighter,” Stephen Innes, managing partner at SPI Asset Management, told CNN Business.
“The lukewarm response on mainland stocks suggests that a broader economic reopening may be needed,” Innes said.
— CNN’s Shawn Deng, Elizabeth Yee, and Lauren Lau contributed to this report.
