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Subsidies to Aid Businesses in Shanghai
Efforts to boost SARS-hit sectors

The Shanghai government Monday announced a series of measures to revitalize an economy that has been slowed by the outbreak of SARS.

The city's Economic Commission has set up a 300-million-yuan (US$36.1 million) fund to subsidize marketing and sales activities at state-owned manufacturers.

It also created a 3 million yuan (US$361,000) fund to support research and development of SARS-related products.

The government will also offer a series of subsidies to companies that have seen business drop due to SARS or had to pay large amounts of money on disinfection or improved hygiene.

Food processing companies, caterers and public bathroom operators will get a 50 percent rebate on fees paid for hygiene and quality certificates this year.

Vegetable wholesalers will get a complete refund for the cost of quality checks during May, June and July, while produce wholesale markets and food processing companies will get a rebate for any money spent on equipment used for quality inspections.

The city's Agricultural Commission will give subsidies to seed and seedling producers and shrimp farmers who suffered from economic losses as the supply from southern provinces has been interrupted by SARS. Vegetable exporters will get financial awards for enlarging their overseas market share.

"Other supportive policies concerning taxation are in the pipeline and will be released soon," said Cai Hongsheng, director of the Commercial Commission.

The commission is expected to reduce taxes on restaurants for a period to help them through the business slowdown.

"We will never loosen the string on SARS prevention," said Shanghai Vice Mayor Tang Dengjie. "But the city government is creating a better environment to revive business."

While many of the government policies are yet to be implemented, the local economy is already on the upswing due to revived consumer spending.

Sales at local department stores last week rose 15.8 percent over the previous week and well-established restaurants reported that business had rebounded to about 70 percent of the pre-SARS level, compared with only 20 percent in late April, according to the commission.

The travel sector is also making a small but sure comeback with a growing number of local residents enjoying short trips to suburban parks and nearby destinations last weekend.

Century Park in Pudong hosted 20,000 visitors a day over the weekend, twice as many visitors as previous weekends.

"We don't want to live under the shadow of SARS. Getting back to the nature is a good way to release pressure," said Xing Xiaofang, who traveled to a suburban campsite with six family members on Sunday.

(eastday.com June 3, 2003)

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