A guideline to further facilitate investment in Shanghai was released by the municipal government on Tuesday, which experts said will help further stabilize the city's economic growth and improve its overall business environment.
According to the guideline, digital transformation will be a focus of Shanghai's investment this year. A total of 100 billion yuan ($15.8 billion) will be in place in the form of loans with a favorable interest rate to support new infrastructure projects. Efficiency in loan usage is also underlined by the guideline.
For these infrastructure projects, the three-year bank loan rate is set at 40 basis points lower than the one-year loan prime rate, while loans with a maturity from three to five years will have the rate set at 10 basis points lower than the one year LPR. The interest rate will be no more than 4 percent for bank loans longer than five years.
The development of new types of hospitals, smart factories and smart transportation should be accelerated with the investment, said Hua Yuan, director of the Shanghai Municipal Development and Reform Commission.
Emerging industries including integrated circuits, software and artificial intelligence should be supported to have their capacity further expanded. More social capital should be directed into low-carbon investment, Hua said.
Special bonds will be issued and used more efficiently to ensure capital support for major projects, he said. All the special bonds for Shanghai this year as designated by the Ministry of Finance are expected to be issued by the end of June.
More than 200 billion yuan is to be invested in Shanghai this year for a number of major projects, said Zhu Jianhao, deputy director of the Shanghai housing and urban-rural development committee.
Over 100 billion yuan of investment in major projects will be made in the first half of this year, up 10 percent year-on-year. Up to 40 billion yuan of the investment is expected to be completed in the first quarter and the rest in the second quarter, Zhu said.
Investment in major projects takes up more than one-fifth of Shanghai's annual fixed asset investment. Fixed asset investment grew by 10.3 percent year-on-year in Shanghai in 2020 thanks to enhanced investment environment, according to the commission.
Optimization of the business environment in Shanghai is another focus highlighted in the guideline. The municipal government will continue to solicit opinions from companies to help solve bottlenecks while making investments.
More high-quality projects covering IC, biomedicine, AI, auto and high-end equipment should be introduced to Shanghai. Services for foreign investment should also be improved by coordinating different projects and simplifying application materials, the guideline said.