Shanghai lockdown: Covid cases hit new low as city unveils 50-point exit strategy with subsidies, spending coupons to repair economy

New daily cases fell to 122 from 170 over past 24 hours, according to official data on Sunday, as city edges closer to ending a lockdown on 25 million residents
New 72-hour rule on test results unveiled for residents to access public transport, public areas, akin to measures in other cities previously hit by lockdowns

Shanghai

Tracy Quin Shanghai

Published: 12:00pm, 29 May 2022

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Shanghai unveiled a comprehensive 50-point plan to repair its US$637 billion economy as the city prepares to exit from two months of lockdown after new Covid-19 cases fell to the lowest level since mid-March, government officials said.

The plan covers eight major aspects, from helping enterprises reduce operating costs and incentives to prevent job losses to broader reopening measures, they said at a media briefing and on an official WeChat account on Sunday. The move is in line with Premier Li Keqiang’s call last week to spare no effort in stabilising the economy and restoring confidence among foreign investors.

A “white list” system, or companies approved to resume production under “closed loop” arrangement, will be scrapped after June 1, as consent would no longer be needed, the government said. Authorities will allow more time for tax and social welfare payments for industries including food, retail and tourism, and cut rents of state commercial properties for small businesses.

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The plan underscores growing confidence among planners in meeting the gradual reopening of the city of 25 million residents as it edges closer to winning the fight against the Omicron variant.

New cases fell 28 per cent to 122 over the past 24 hours as the city moves closer to a gradual reopening from June 1, according to data released on Sunday. Cases showing symptoms shrank by a quarter to 29, while no deaths were recorded for a second day.

In an earlier briefing on Sunday, the Shanghai government said residents will be required to present nucleic acid tests within 72 hours of using public transport or entering public areas starting next month.

This approach has been deployed in other major cities in China that previously faced some form of lockdown, including in the tech hub of Shenzhen in southern Guangdong province. Hangzhou, the e-commerce hub in eastern Zhejiang province, has also asked residents to present such evidence within 48 hours, before extending it to 72 hours last week.

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“We firmly hold to the bottom line of preventing a large-scale rebound” in cases, Shanghai mayor Gong Zheng said in an official WeChat post on Sunday. “All districts and departments must promptly monitor the situation, fully support and organise enterprises to resume work and production, and do their best to make up the [economic] loss and [wasted] time.”

The Shanghai government is seeking to reopen the city in a gradual and phased manner, aiming to restore business activity and daily livelihoods to full normality. Almost 6,000 companies have been added to the so-called “white list” through May 20, allowing them to restart production under certain Covid-prevention guidelines.

That would be a relief as the partial and total isolation in Shanghai and 40-odd mainland cities slammed production and upended major industrial supply chains. Shanghai – home to Tesla, chip maker Semiconductor Manufacturing International Corp (SMIC) and a slew of car producers – accounts for almost 4 per cent of national economic output.

The economic toll has prompted Wall Street economists from Goldman Sachs to JPMorgan Chase to trim their growth forecast for 2022 below Beijing’s 5.5 per cent target, citing a stop-start pattern in activity. Several private banks have also suggested the economy is likely to shrink this quarter, stoking recession risks.

Among Sunday’s 50-point plan, the government will also offer up to 3 million yuan in incentive for each company to fend off large-scale lay-offs. A 10,000 yuan subsidy for electric-car purchases and retail spending coupons are also being rolled out.

Still, caution prevailed as authorities on Sunday said one infection was detected outside the precautionary zones in Pudong district, highlighting the challenges to keep the Omicron at bay even as the city edges closer to winning the battle and freeing its 25 million residents from stringent movement curbs.

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The close contacts of the new infection have been tested and placed in quarantine facilities, with none testing positive so far, according to local officials at the regular press briefing on Sunday. The new infection has not derailed the city’s reopening plan for June 1.

A total of 660 supermarkets and convenience stores have been opened in Pudong district, while 41 grocery markets have resumed business. Shopping complexes are being reopened in batches, including some landmark malls, Yan Bo, the district’s deputy mayor, said in a media briefing.

While many districts in the central area in Shanghai are still implementing strict control measures, suburban areas such as Jinshan and Fengqian are leading the reopening process, where public transport has been restored and private cars are allowed to be on the road.

Over the weekend, hundreds of people were seen gathering along a street in Xuhui district, drinking and chatting, some without wearing face masks, according to videos posted on local social media platforms.