Shanghai Releases 22 New Stimulus Measures to Boost the Economy
On September 26, 2022, the Shanghai Municipal Government released a set of 22 measures in a document introduced as Several Policies and Measures of Shanghai on Supporting Industries, Bolstering Market Entities and Stabilizing Growth (“new measures”), including a broad variety of strategies to jump-start economic recovery and expansion of the services sector, such as tourism and aviation, in a full-fledged effort to accelerate the city’s economic growth for the remainder of 2022. The measures were announced and publicly discussed during a press conference held on September 28, 2022, in the presence of Wu Qing, Member of the Standing Committee of the Shanghai Municipal Party Committee and Executive Vice Mayor.To get more Shanghai news, you can visit shine news official website.
Since the beginning of 2022, the Shanghai Municipal Government has successively introduced two rounds of policies to help enterprises and stabilize growth, namely the 21 policies ‘to fight the pandemic and help enterprises promote development’, released in March, and the 50 measures for ‘economic recovery and revitalization’, announced at the end of May.
Drawing upon the previous two rounds of policy measures, the latest batch follows the State Council’s 19-point growth plan released in August of the same year.
The slew of stimulus measures is an attempt to hasten the city’s economic recovery. According to the local customs agency, Shanghai’s overall foreign trade volume in the first eight months of 2022 was RMB 2.7 trillion (US$390 billion), up 4.8 percent year on year, reversing a minor annual dip in the first half of the year due to the impact of the COVID-19 lockdown.
Relief and support measures for businesses
The policy package includes mechanisms and proposals for assisting micro, small, and medium-sized enterprises (MSMEs) in their economic recovery and growth. Small enterprises are regarded as the basis of the Chinese economy, accounting for the great majority of total firms, and producing over half of the national GDP. They are also among the most vulnerable institutions in the countries, and as such, the government has prioritized their protection and survival.
In China, MSMEs respond to specific legal designations illustrated in regulatory documents, such as the Small and Medium-Sized Enterprises Classification Standard.
Loans and risk compensation funds for MSMEs
The new measures seek the implementation of the national requirements for establishing loan risk compensation funds for both MSMEs and self-employed businesses. They also call for the promotion of a long-term mechanism for credit awards and subsidies. This is because measures, such as the loan risk compensation scheme and subsidies, are used to stimulate the spending of MSMEs to generate overall growth.
According to the new policies, in the fourth quarter of 2022, MSMEs will be given a two percent discount interest subsidy, with a maximum amount of discount interest for a single enterprise amounting to RMB 200,000 (US$28,105).
Deferment of medical insurance
Starting from the fourth quarter of 2022, the ratio of employees’ medical insurance (including maternity insurance) contributed by the employer will be reduced by 0.5 percent. Moreover, in accordance with the latest national policy requirements, the medical insurance payment for September, October, and November can be deferred.
In addition, the collection of drug registration fees and medical device product registration fees will be deferred for one quarter.
Expanding the scope of fees reduction and exemption policies
Striving to ensure employment, safety, and livelihood is another major objective of the new policy plan. To achieve so, the measures call for the implementation of the requirements of the national one-time post-expansion subsidy policy, and further expand the subsidy scope to key groups such as unemployed college graduates and registered unemployed youth. Social security subsidies will be given to those who have difficulties in flexible employment, and college graduates who have been unemployed for over two years.