(Yicai Global) July 26 -- Shanghai has introduced a series of measures, including tax incentives and recruitment subsidies, to help individual business owners, a major driving force of economic activity, get over the Covid-19 pandemic.

The eastern megacity is targeting its 500,000 individual industrial and commercial households via rent relief and credit support, the local administration of market regulation wrote in a document published today.

Individual industrial and commercial households account for 15.7 percent of all market entities in Shanghai, Chen Yanfeng, deputy director of the bureau, said at a press conference held today. Findings of a recent survey show that these households are currently facing hiring bottlenecks, surging costs, and tight capital conditions, so they could use more stability, Chen added.

The solution has many layers. First, the city will further decrease taxes on such households. For example, small-scale taxpayers whose monthly sales do not exceed CNY150,000 (USD22,215) will be exempted from value-added tax.

Moreover, those business owners whose landlords are state-owned can enjoy six months of rent forgiveness. Additionally, the municipal government will provide a one-time recruitment subsidy of CNY2,000 (USD296) per person for eligible households.

Shanghai will lead commercial banks to enhance their credit support to these businesses. Lenders should develop exclusive credit products for industrial and commercial households and assist entities badly hit by the pandemic through loan deferrals.

As of June 30, the balance of inclusive loans provided by Shanghai's financial institutions to individual industrial and commercial households was CNY32.5 billion (USD4.8 billion), an increase of 14 percent from a year earlier, Cao Guangqun, deputy director of the Shanghai arm of the China Banking and Insurance Regulatory Commission, said at the press conference. That means nearly 330,000 households got such loans, he added.

Shanghai’s inclusive loan interest rate for small and micro enterprises was about 4.92 percent, one of the lowest in the country, as of June 30, Cao revealed.

Editors: Dou Shicong, Emmi Laine, Xiao Yi