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

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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.

Published: 7:30am, 26 Aug 2022Updated: 9:53am, 26 Aug 2022

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.

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.