Shanghai, China to release 56 trillion won from ‘blockade shock’

Shanghai, China, which had been locked down for two months due to the spread of Corona 19, has started to revitalize the economy by pouring out large-scale economic stimulus packages. Beijing, which was virtually locked down, also resumed some business operations to prevent a sharp contraction in consumption. When Premier Li Keqiang recently ordered measures to revitalize the economy, saying, “We need to strike a balance between quarantine and the economy,” local governments seem to be responding positively.

According to the state-run Xinhua News Agency on the 30th, the Shanghai Municipal Authority announced the day before the ‘Shanghai Action Plan to Accelerate Economic Recovery and Revitalization’ containing 50 measures in 8 sectors.

The sector in which the most measures have been poured is consumption expansion. By easing the license plate allocation regulations that have been in effect since 1994, an additional 40,000 vehicles will be issued this year. A subsidy of 10,000 yuan (about 1.86 million won) will also be provided to consumers who purchase electric vehicles. It also supports large shopping malls and e-commerce platforms to issue consumption coupons.

In order to alleviate the burden on citizens, support measures such as a three-month reduction in water, electricity, and gas fees and a three-month exemption from household waste disposal fees have also been introduced. Employment subsidies of up to 3 million yuan (about 560 million won) have been allocated to companies that are expanding employment. In addition, Shanghai Municipal authorities are planning to accelerate investment in infrastructure, including a significant increase in new housing construction. Plans to support the resumption of operations for foreign companies and plans to expand investment were also included.

In addition, the city of Shanghai has allowed only some key companies to operate factories in order to control Corona 19, but in the future, it is planning to allow all business sites to resume operation. Xinhua News Agency reported that the Shanghai city’s support measures will provide benefits to market participants at 300 billion yuan (about 56 trillion won). In the aftermath of the prolonged city lockdown, retail sales in Shanghai in April fell by a whopping 48.3% compared to the same period a year earlier, stressing the leadership of the Communist Party. During the same period, industrial production also decreased by 61.6%.

Beijing has also partially eased its quarantine measures as the rapid spread of COVID-19 has subsided. Beijing has allowed city parks, gyms and movie theaters to reopen on condition that they receive up to 50% of their capacity. In addition, bus, subway, and taxi operations were normalized from the 29th in three districts: Chaoyang, Shunyi, and Fangshan. However, measures such as online classes in elementary, middle and high schools, bans on eating in restaurants, and closure of PC rooms and karaoke rooms will continue for the time being.

[베이징 = 손일선 특파원]
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