Authorities in Shanghai say restrictions on businesses will be removed from Wednesday, for the first time since the city was hit by a recent coronavirus outbreak.

The decision comes following two months of lockdown measures for the Chinese commercial hub.

The daily tally of new cases in Shanghai dropped to just over 100 on Saturday, from more than 20,000 at the peak.

Executive Vice Mayor Wu Qing told reporters on Sunday that the pandemic had a great impact on the economy and the city is facing an unprecedented predicament.

He announced that businesses will be allowed to reopen from June 1 on the condition that thorough anti-virus measures are taken.

So far only a limited number of companies have been allowed to resume operations, such as those in the semiconductor and auto industries.

The authorities earlier announced a plan to restore normal life and business activities from mid-June onward, while keeping coronavirus infections under control.

But residents in many parts of Shanghai are still banned from freely going outside.

Attention is now focused on whether companies can secure enough manpower to resume normal activities.