Shanghai to End Covid Lockdown, Moves to Boost Economy
After winning the battle against the Covid epidemic, revitalizing the economy has become the focus in the next stage in Shanghai, the country’s commercial hub. After two months of city-wide lockdown, starting from June 1, more than 20 million Shanghai citizens will be able to freely enter and leave their residences, and public transportation such as subways will resume basic operations. China’s largest city will get back on its normal track.
Shanghai, an international city, is on the road to recovery. The government is introducing a series of policies to support its battered economy, including stimulating consumption, promoting production, encouraging foreign trade, and providing bail-out assistance to businesses. These policies and measures are both encouraging and effective, helping to stabilize the mentality of the industry and the public. Shanghai is gradually stepping out of the lockdown with all its strength and returning to normal life.
China’s Real Estate Sector in Need of Bail Out
Private housing enterprises, as the main force in China’s real estate industry, are in the midst of a mass crisis. According to a report released by a research institution, among the top 100 housing companies with the largest sales in 2021, 30 have been exposed to operational risks so far. At the same time, among the 100 companies, 70 are private enterprises, and 29 of them are at risk, accounting for more than 40%. At present, the liquidity crisis of private housing enterprises is intensifying.
China’s real estate industry has experienced rapid development for nearly two decades. It is the largest driving force for economic growth and the largest source of finance for most local governments. However, due to high leverage development, many real estate companies have weak anti-risk capabilities. There are hidden dangers of causing financial risks. Therefore, since 2020, financial authorities have strictly regulated the property industry. This painful adjustment is inevitable for the long-term development of the real estate industry. Now, many professionals believe that the rectification is done, but the battered industry now desperately needs help to get back on its feet.
U.S. Lawmakers Launch Harsh Bill to End Tech Giants’ Ad Dominance
On May 19, several U.S. senators launched a bill called “Competition and Transparency in Digital Advertising” (also known as CTDA) to the Senate. The bill aims to address anticompetitive practices and protect digital advertising competition.
In the case of Google’s dominance, advertisers have gradually developed high degree of dependence on the giant’s service. As a result, competition is blocked and the tech company is taking advantage of the customers. While squeezing the living space of other digital advertising platforms, Google also has large influence on advertisers undermining fair competition. If the bill passes, tech giants such as Google, Meta and Amazon may have to divest most of their advertising businesses. And because Google is the biggest player in digital ad market, it could be the most affected. However, with the advantages of data and algorithm technology, Google, which also has strong financial and technical strength, may find alternative ways to develop business models in the digital advertising market, thereby gaining a new market advantage.
China Rolls out New Measures to Get Economy Back on Track
To achieve the long expected annual economic growth rate of 5.5%, it is crucial for that number to return to above 5% in the second quarter. The State Council recently unveiled a package of policy items to protect market entities, ensure employment, and bail out companies, hoping to recover losses and bring economic operations back on track quickly.
The aforementioned policies set forth specific enforcement rules. These measures require all localities to seize the time window to provide assistance to market entities and the public, thereby promoting the rapid return of economic operations to the normal track. Shanghai will fully restore the normal order from June 1. The series of policies proposed by Shanghai to stabilize foreign investment and promote consumption are injecting vitality into all walks of life. At the same time, decision-makers of some local governments went to various places to conduct research, trying to implement the national bailout policy, doing their best to stabilize the economy.
