Shanghai announces a series of policies to revive the economy
As Shanghai reopens After two months of strict lockdown, China’s financial hub has rolled out dozens of policies it hopes will help revive its economy.
The municipal government aims, in particular, to support the real estate market – which was already suffering from a nationwide liquidity crisis before the start of the epidemic – as well as to support small businesses and consumer demand.
In a policy document (link in Chinese), the city says it will approve new housing projects and allow developers to delay paying land-use fees to authorities. He also promises preferential policies to help people buy their first or second home, without giving details.
In April, Shanghai home sales by floor space fell 85.7% from a year earlier and 80.3% from a month earlier, according to a report by real estate think tank Tospur Real Estate. Consulting Co.Ltd.
Small businesses and the self-employed who rent space from public entities will be offered six months rent-free, the government said, adding it was encouraging private landlords to do the same. The government will offer up to 3 million yuan ($450,600) to landlords who waive rent.
An equivalent subsidy will be offered to companies in certain hard-hit sectors, such as catering and tourism, for the retention of staff.
Many small enterprises struggled to pay their workers and rents during the lockdown as strict stay-at-home orders for much of the city’s population meant many areas had virtually no income during the period. A wave of business closures is likely in the near future, some business owners told Caixin.
The city’s industrial production fell 61.6% year-on-year in April and retail sales fell 48.3%.
Like some other local governments, Shanghai also plans to subsidize consumer spending on durable goods such as cars and appliances. Individual customers will receive up to 10,000 yuan each if they buy an electric car this year and sell or scrap their old cars, according to the statement.
Banks are being asked to defer loan repayments until the end of 2022 for small businesses, freelancers, truckers and buyers whose income has been affected by the lockdown.
Lenders are also expected to provide cheap loans to small and medium-sized businesses and those that have been hit hard by the lockdown.
Yuan-denominated loans fell by 56.5 billion yuan in April, according to the local branch of the People’s Bank of China. That compares with a 337.3 billion yuan expansion in the first quarter.
The document also says that the government will help foreign companies meet the challenges of logistics, production and cross-border travel. The authorities will facilitate entry and exit procedures for their employees and their families, as well as for global executives, the statement said.
Bao Zhiming, Zhu Liangtao and Peng Leyi contributed to this report.
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