Shanghai offers 140-billion yuan lifeline in tax rebates, rent exemptions and financial subsidies to help businesses survive city’s phased lockdown

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Shanghai’s authorities offered 140 billion yuan in tax rebates, cut a range of fees, and exempted certain designated companies from paying rent for three months

The government also instructed banks to offer low-interest bridging loans to help companies whose businesses were hurt by the city’s lockdown.

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A view of the Lujiazui financial district across the Huangpu River from The Bund in Shanghai on 28, 2022. Photo: Reuters

Daniel RenandZhang Shidong

Published: 4:09pm, 29 Mar 2022Updated: 4:50pm, 29 Mar 2022

Shanghai municipal government is offering a package of incentives, rebates and exemptions to help businesses survive the city’s phased lockdown to contain the worst Covid-19 outbreak in mainland China’s commercial hub.

Local authorities offered 140 billion yuan (US$22 billion) in tax incentives, cut a range of fees, and exempted certain designated companies from paying rent for three months, according to an online press briefing on Tuesday.. The government said it would cut its value-added tax (VAT) and corporate income tax.

The government also instructed banks to offer low-interest bridging loans to help companies whose businesses were hurt by the city’s lockdown.

“The package of incentives is strong, [and is aimed at helping] troubled businesses keep jobs,” said Ruan Qing, the deputy director of the Shanghai Development and Reform Commission during the press briefing. “We take an open attitude towards policymaking, and will adjust our policies to better cater to the demands of the virus-hit companies.”

A girl is tested for the coronavirus disease (COVID-19) at a makeshift nucleic acid testing centre inside the barriers of an area under lockdown in Shanghai on March 26, 2022. Photo: Reuters.

Shanghai has reported nearly 20,000 Covid-19 infections since March 1, raking up more cases in four weeks than the past two years of the pandemic, putting its much-lauded containment strategy at risk.

Most of the reported cases had been asymptomatic, but local authorities took no chances since the latest outbreaks were caused by the highly transmissible Omicron variant. An out-of-control disease could foil this year’s 5.5 per cent economic growth pace, which is already expected to be slower than last year’s 8.1 per cent clip.