After years of stagnation, the great metropolis of Shanghai (上海, shànghăi) is undergoing one of the fastest economic expansions the world has ever seen. As Shanghai begins to recapture its position as East Asia’s leading business city, a status it last held before World War II, the skyline is filling with high-rises – there are well over a thousand now. Gleaming shopping malls, luxurious hotels and prestigious arts centres are rising alongside, while underneath everything snakes the world’s longest subway system. Shanghai’s 23 million residents enjoy the highest incomes on the mainland, and there’s plenty for them to splash out on; witness the rash of celebrity restaurants and designer flagship stores. In short, it’s a city with a swagger, bursting with nouveau-riche exuberance and élan. And yet, for all the modernization, Shanghai is still known in the West for its infamous role as the base of European imperialism in mainland China during the 1930s.

Whichever side you were on, life in Shanghai then was rarely one of moderation. China’s most prosperous city, in large part European- and American-financed, Shanghai introduced Asia to electric light, boasted more cars than the rest of the country put together, and created for its rich citizens a world of European-style mansions, tree-lined boulevards, chic café society, horse-racing and exclusive gentlemen’s clubs. Alongside, and as much part of the legend, lay a city of singsong girls, warring gangsters and millions living in absolute poverty.

Then came the Japanese invasion, civil war and the communist victory. With their egalitarian, anti-Western stance, China’s new rulers despised everything that pre-war Shanghai had stood for and deliberately ran the city down, siphoning off its surplus to other parts of the country. Shanghai came to resemble a living museum, housing the largest array of Art Deco architecture in the world. Yet the Shanghainese never lost their ability to make waves for themselves. The present boom dates back to 1990, with the opening of the “New Bund” – the Special Economic Zone across the river in Pudong. Ever since, the city has enjoyed double digit growth, and if present plans for a new economic free trade zone come to pass, it will likely one day rival Hong Kong as Asia’s financial centre.

Yet old Shanghai has not disappeared. Most of the urban area was partitioned between foreign powers until 1949, and their former embassies, banks and official residences still give large sections of Shanghai an early twentieth-century European flavour. It’s still possible to make out the boundaries of what used to be the foreign concessions, with the bewildering tangle of alleyways of the old Chinese city at its heart. Only along the Huangpu waterfront, amid the stolid grandeur of the Bund, is there some sense of space – and here you feel the past more strongly than ever. It’s ironic that the relics of hated foreign imperialism are now protected as city monuments.

Shanghai does not brim with obvious attractions, however. Besides the Shanghai Museum, the Suzhou-reminiscent gardens of Yu Yuan, and the Huangpu River cruise, there are few tourist sights with broad appeal. But the place absolutely excels in all materialistic pleasures, so make sure you sample the fantastic restaurant and nightlife scenes, and budget some time for serious shopping. Perhaps the greatest fascination is in simply absorbing the splendour of a city so extravagantly on the up. Shanghai is also one of the few Chinese cities that rewards aimless wandering, and it’s fascinating to stroll the Bund, explore the pockets of colonial architecture in the former French Concession, or get lost in the old city’s alleys.

Brief history

Located at the confluence of the Yangzi River, the Grand Canal and the Pacific Ocean, Shanghai served as a major commercial port from the Song dynasty, channelling the region’s extensive cotton crop to Beijing, the hinterland and Japan. By the Qing dynasty, vast mercantile guilds had established economic and, to some extent, political control of the city. In the words of East India Company representative Hugh Lindsay, “the city had become the principal emporium of Eastern Asia” by the 1840s.

The Concession Era

Following the Opium Wars, the British moved in under the Treaty of Nanking in 1842, to be rapidly followed by the French in 1847. These two powers set up the first foreign concessions in the city – the British along the Bund and the area to the north of the Chinese city, the French in an area to the southwest, on the site of a cathedral a French missionary had founded two centuries earlier. Later the Americans (in 1863) and the Japanese (in 1895) came to tack their own areas onto the British Concession, which expanded into the so-called International Settlement. Traders were allowed to live under their own national laws, policed by their own armed forces, in a series of privileged enclaves that were leased indefinitely. By 1900, the city’s favourable position, close to the main trade route to the major silk- and tea-producing regions, had allowed it to develop into a sizeable port and manufacturing centre. At this time, it was largely controlled by the “Green Gang”, the infamous Chinese crime syndicate founded in the 1700s by unemployed boatmen, which by the 1920s ran the city’s vast underworld. Businessmen and criminals who flouted the Green Gang’s strict code of behaviour were subject to “knee-capping” punishment – having every visible tendon severed with a fruit knife before being left to die on a busy pavement.

Shanghai’s cheap workforce was swollen during the Taiping Uprising by those who took shelter from the slaughter in the foreign settlements, and by peasants attracted to the city’s apparent prosperity. Here China’s first urban proletariat emerged, and the squalid living conditions, outbreaks of unemployment and glaring abuses of Chinese labour by foreign investors made Shanghai a natural breeding ground for revolutionary politics. The Chinese Communist Party was founded in the city in 1921, only to be driven underground by the notorious massacre of hundreds of strikers in 1927.

The Communist era

Inevitably, after the Communist takeover in 1949, the bright lights dimmed. The foreign community may have expected “business as usual”, but the new regime was determined that Shanghai should play its role in the radical reconstruction of China. The worst slums were knocked down to be replaced by apartments, the gangsters and prostitutes were taken away for “re-education”, and foreign capital was ruthlessly taxed if not confiscated outright (although Chiang Kai-shek did manage to spirit away the gold reserves of the Bank of China to Taiwan, leaving the city broke). For 35 years, Western influences were forcibly suppressed.

Even after 1949, the city remained a centre of radicalism – Mao, stifled by Beijing bureaucracy, launched his Cultural Revolution here in 1966. Certain Red Guards even proclaimed a Shanghai Commune, before the whole affair descended into wanton destruction and petty vindictiveness. After Mao’s death, Shanghai was the last stronghold of the Gang of Four in their struggle for the succession, though their planned coup never materialized.

Modern Shanghai

Shanghai’s fortunes rebounded during China’s opening up in the post-Mao era: many key modernizing officials in the central government came from the Shanghai area, and Jiang Zemin and Zhu Rongji were both former mayors of the city.

As well as an important power base for the ruling party, Shanghai has always been the most fashion-conscious and outward-looking city in China, its people the most highly skilled labour force in the country, and renowned for their quick wit and entrepreneurial skills. Many Shanghainese fled to Hong Kong after 1949 and oversaw the colony’s economic explosion, while a high proportion of Chinese successful in business elsewhere in the world emigrated from this area. Even during the Cultural Revolution, Western “excesses” like curled hair and holding hands in public survived in Shanghai. Despite the incomprehensibility of the local Shanghainese dialect to other Chinese, it has always been easier for visitors to communicate with the locals here than anywhere else in the country, because of the excellent level of English spoken and the familiarity with foreigners and foreignness.

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