About 22.5 million people, or 90 per cent of Shanghai’s population of 25 million residents, currently live in low-risk “precautionary zones” that have been infection-free for 14 days, can leave their compounds and ride on public transport which has been mostly restored. The Chinese government has earmarked 300 billion yuan (US$45 billion) of tax breaks, financial incentives and spending to restore economic growth in a city, whose lockdown had strained supply chains from Europe to Japan, and driven thousands of businesses to the brink of collapse.

All 2.67 million registered businesses in Shanghai will be allowed to resume operations on June 1, without requiring prior approval from the health authorities, according to the government’s announcement on Sunday.

“After all, it is the millions of small firms that provide the majority of jobs in the city,” said Yin Ran, a Shanghai-based angel investor. “Many of them are on the brink of collapse and need strong incentives from the local authorities to keep their businesses alive.”

While approved companies could resume operating, few could produce at full capacity due to the knock-on effects of disrupted supply chains. The “closed loops”- where workers must sleep on site to ensure zero contact with outsiders – meant that almost every employer could only get a fraction of its workforce back to work.

It wasn’t until late last week that Tesla’s Gigafactory 3 could restore its manufacturing capacity to pre-lockdown levels. The plant, also known as Giga Shanghai, can now churn out about 2,600 electric vehicles a day on two shifts.

Shanghai’s citywide lockdown began on April 1, as the highly transmissible Omicron variant of Covid-19 broke out, forcing local authorities to shut businesses and order residents to stay home. What started as a phased, rolling lockdown between Pudong and Puxi – the eastern and western banks of the Huangpu River that cuts through Shanghai – was replaced with a citywide shutdown.

A total of 588 people have died from Covid-19 since April 18, putting the mortality rate at 0.09 per cent of the 626,600 infected residents. Shanghai had mostly kept the disease at bay since it was first reported in China in 2020, with very few cases and zero deaths until mid-April.

The municipal government will also allow private cars on the roads from Wednesday, according to a statement published on Monday evening.

The Shanghai Administration of Culture and Tourism announced on Tuesday that tourism-related companies, including travel agencies, entertainment firms and hotels, will be granted cash subsidies.

The companies, hard hit by the lockdown, will receive 600 yuan (US$90) for each person they hire, the administration said in a statement.

“The administration will roll out a series of incentives to bail out the embattled tourism sector,” it said.

Walt Disney’s Shanghai Disneyland resort, which has been shut since March 21, has yet to announce when it will reopen to the public.