Advertisement
Shanghai reopening
BusinessChina Business

Shanghai to fast-track new manufacturing projects and expansions to help China’s economic ‘dragon head’ make up for lost time

  • Tesla will begin building a second assembly in the coming months to bolster its million- vehicle annual capacity by 450,000 units in the Lingang free trade zone
  • As many as 72 projects began laying the groundwork in Lingang last week near Tesla

Reading Time:2 minutes
Why you can trust SCMP
Employees on the Shanghai production line of the German engineering group Voith, which resumed production after the city’s lockdown, during a government-organised media tour on July 21, 2022. Photo: Reuters.
Daniel Ren

Shanghai’s government will fast-track the approvals of new manufacturing projects to undergird production, as China’s commercial hub grapples to get economic activity back on track after a two-month lockdown in April and May.

Advertisement

The city, whose economy contracted by an unprecedented 5.7 per cent in the first six months, must convince global investors of its resilience, as it grapples with the consequences of lost production, missed deadlines and supply chain disruptions during the period, said Quan Heng, the Communist Party secretary and a researcher of the Shanghai Academy of Social Sciences (SASS).

“Key industrial projects can effectively bolster economic output, [which is why] the municipal government is accelerating the pace of approvals,” said Quan, who represents the think tank and economic policy adviser, during a media briefing on Thursday. “The moves are not just aimed at shoring up economic data, but also driving technological innovations to pursue high-quality growth in the future.”

The city of 25 million residents, often dubbed the “dragon head” of China’s economy, is home to the Chinese operations of Tesla, General Motors, and millions of factories, as well as the country’s main onshore financial centre. Growth is likely to miss the 2022 target of 5.5 per cent, he said, as the economy struggles amid a power shortage and intermittent anti-Covid policies to get back to normal.
Shipping containers at the Yangshan Deep Water Port at the Shanghai Free Trade Zone, on February 13, 2017. Photo: Reuters.
Shipping containers at the Yangshan Deep Water Port at the Shanghai Free Trade Zone, on February 13, 2017. Photo: Reuters.
Shanghai’s second-quarter economy shrank by 13.7 per cent from last year, as business activity came to a standstill from the city’s lockdown from April 1 to June 1 to contain a spreading coronavirus outbreak.
Advertisement

To make up for lost time, the local government is aggressively kicking off constructions and greenlighting expansion plans. That includes giving Tesla the go-ahead to add an electric car assembly line to its first wholly foreign-owned factory, according to two Shanghai government officials.

Advertisement