In April-May this year, Shanghai's economy, under a citywide lockdown due to the COVID-19 resurgence, took a hard hit.

The movement of people and goods was basically at a standstill, striking economic activity and the generation of revenues.

Service industries, including catering, entertainment and tourism, were the worst affected by the loss of mobility, with target consumers under blockade, and logistics stalled.

The city then carried out a special pass management policy allowing the resumption of some logistics, which partially alleviated the difficulties for the economy.

Compared with the service sector, manufacturing industries were less affected, with a certain inventory buffer including raw materials and intermediate goods.

But on the whole, they were still facing problems led by poor logistics. What they had produced could not be shipped out, while the intermediate goods and parts needed could not be shipped in.

Because of these factors, a negative economic growth was inevitable in the short term. According to the National Bureau of Statistics, Shanghai's economic output decreased 13.7 percent from a year earlier in the second quarter, and lost 5.7 percent in the first six months.

This reveals to us that the most important thing for a city's economy is to ensure mobility and smooth flow of people, capital, goods and information, just like a human circulatory system.

We are in a market economy, an open one, which means all policies affecting mobility, and unexpected incidents such as pandemics, will have a large impact on the economy in the short term.

Unlike other international metropolises such as New York and Hong Kong, Shanghai sees a sizable chunk of GDP (about one-fourth) contributed by manufacturing industries.

The presence of manufacturing sector to some extent cushioned the shock of the pandemic outbreak on Shanghai's economy. The situation would be way more severe if the city had placed all bets on the service sector.

Manufacturing, compared with services, is not as fragile, and many industries can operate in a closed loop. Automation has also enabled many industries to replace human labor with robots, which is undoubtedly a big trend in the future.

For the service industry, to recover as soon as possible, the most important thing is to improve the capacities for pandemic surveillance, epidemiological investigations and nucleic acid tests.

Shanghai, with relatively good local financial conditions and solid medical resources, can also expect an accelerated economic recovery.

Another concern was to keep the city's core functions on track. Shanghai's core functions of finance, trade and shipping have seen the technical means highly modernized, with a sheer volume of transactions are carried out online.

That means they can keep running with only a small number of staff on duty at the site when hit by a pandemic outbreak or a lockdown.

It also reminds us that Shanghai, as a financial center, must have a fully functional and efficient disaster recovery system covering various financial operations, including capital markets, commodity futures and funds and securities.

Many institutions may have established some but had no chance to test them before. This outbreak just offered such an opportunity.

A leader of the Shanghai Gold Exchange, for instance, mentioned that in addition to the exchange's delivery center in Shanghai, it also has a back-up trading center in Shenzhen, to reckon with emergencies in Shanghai.

For the second half year, the biggest enemy of economic recovery and stability is uncertainty.

Shanghai's top priority should be to create a scientific, transparent and predictable policy environment, which is important for households, investors, entrepreneurs and businesses.

I'm hoping to see authorities in Shanghai sorting out the policy environment after the pandemic, and clearing up the restrictive practices and redundant measures as soon as possible, so that the policies can be clearer and more transparent.

My advice is that the city government should attach importance to this problem and make current policies clear at a glance. They can do so by a fixed policy window or hotline, so as to reduce the uncertainty of people's living, investing, buying property and doing business in Shanghai.

Shanghai, with the most developed economy in China, should lead the country in innovation in all fields.

It should also take the lead in making use of the blow of the pandemic to drive a shift in the way the local economy develops, namely, to substantially reduce government intervention and follow more closely the rules of the market.

To put it straight, the city should set store by allowing and encouraging the independent choice of market players. The government's task, meanwhile, should be to improve the policy environment, to eliminate all kinds of uncertainties, and to offer institutional support for fair market access and fair competition, effectively protecting the rights and interests of market players.

(The article is collated by Shanghai Daily reporter Huang Yixuan based on an interview of Professor Zhang Jun with Jiefang Daily.)