The Early Years

Although Shanghai’s explosion onto the world scene is comparatively recent, the city has a trading history of nearly 1,000 years. Shanghai’s strategic location near the Grand Canal and the confluence of the Yangzi and the East China Sea made it a natural distribution point for the cotton, rice and silk grown in the region, which was first put to use during the Song dynasty.

The Beginning of Foreign Influence

By the middle of the 19th century, Shanghai was a regional trading hub and, based on this, the British sought land and trading rights here after victory in the First Opium War (1840-42). They were ceded 140 acres of muddy riverbank north of the walled Chinese city, which became known as the Bund. Other nations soon wanted to get on the bandwagon, and the French established themselves west of the Chinese town in 1847, while the Americans settled north of Suzhou Creek in 1863. The British and American parts of town became known as the International Settlement, while France’s sector was called the French Concession. The international communities within both settlements lived completely apart from the Chinese, under their own laws, and they prospered from trading opium in return for the exotic goods of the East that were exported to their home countries. The Taiping Uprising (1850-64) threatened Shanghai’s fortunes and, in response, international forces helped to quell the revolt both in the city and throughout the country, which reaffirmed the military superiority of the colonials. With greater confidence came houses and offices in the home styles of the expat community, and Shanghai’s infrastructure was developed, giving the city China’s first telephones (1881), electricity (1882) and running water (1884).

Japanese Factories, White Russian Workers & Iraqi Jewish Tycoons

Defeat in the Sino-Japanese War led to the establishment of a Japanese Concession in 1895, and with it the beginnings of an industrial base in Shanghai. The Japanese had acquired not only a trading post, but the right to manufacture. Other nations quickly followed suit. Aided by its strategic location and fueled by cheap labor, Shanghai developed as a manufacturing center. However, poor working conditions and pay for the Chinese laborers in Shanghai’s factories soon instilled resentment against the foreign community, which was echoed by the nationwide Boxer Rebellion in 1899. The collapse of the Qing dynasty in 1911 had little effect on Shanghai’s dynamism, and likewise business went on as usual during World War I, although the rise of the Bolsheviks in Russia saw an influx of White Russians to the city. Refugees, rather than gentleman traders, the White Russians were resented by the existing foreign community, particularly for their willingness to work any job, which showed the Chinese a vulnerable side to the supposedly impervious Caucasians. Iraqi Jews such as the Hardoons, Kadoories and Sassoons, many of whom had originally worked for the British, became increasingly wealthy and powerful during this time and some of their grand buildings still dot the city today.

Gangsters & Glory

Despite increasing Japanese expansionism, Shanghai seemed unstoppable and became more cosmopolitan and raucous as the years went by. Gangsters had always been influential in Shanghai and during the 1920s the city was principally controlled by the notorious gang leader, Du Yuesheng (aka Big Eared Du), which seemed just fine with everybody as long as things were run efficiently. As part of a plan conceived by the nationalist party and foreign concerns, Du and his Green Gang carried out a full-scale massacre of Communists in 1927, which saw Mao Zedong flee for the hills – little wonder Du escaped from the mainland when the Communists gained power in 1949. In the 1920s the foreign communities further consolidated their holdings and many of the Bund’s neo-classical buildings were constructed. The 30s were Shanghai’s decade and the city became known as the Paris of the East – a somewhat glamorous term for the brothels, gangsters, opium dens and gold-rush feel that the city afforded. A few famous movie studios developed and the international community became curious about this exotic and dangerous outpost on the other side of the world. As a result a few famous faces found their way here, including Charlie Chaplin!

Japanese Control & the End of an Era

The bubble finally burst and the Japanese, who had gradually been swallowing up more and more of northern China (see Japanese Encroachment and Civil War, p. 20) overran Shanghai. The Japanese controlled Shanghai until they were evicted by US forces at the end ofWorldWar II in 1945, and the Americans stayed in place for a year before handing power to Chiang Kaishek. However, Chiang and the nationalists were on their way out and, as the Communists gained more ground, many of Shanghai’s great industrialists fled to Hong Kong or back to their home countries. After the formation of the PRC in 1949, little by little the Communists commandeered Shanghai’s businesses to contribute to the development of the country.

Renaissance

Both Mao and Zhou Enlai kept houses in this former capitalist playpen and the bright lights of Shanghai’s heyday were turned off for some 40 years. After the death of Mao, Shanghai continued to be neglected for its bourgeois past. It wasn’t until 1990 that the party decreed the city was, once again, to be the country’s economic heart, much to the chagrin of newly rejoined Hong Kong. Pudong was designated as a Special Economic Zone and since then Shanghai has seen unparalleled development in all areas: business, transport, tourism, culture and the arts are all flourishing in the modern city.

The Costs of Development

Aside from Hong Kong, Shanghai is China’s most cosmopolitan, westernized and developed city, and is once again attracting large scale overseas investment and foreign residents. However, Shanghai’s development has its costs. Nearly 20 million people are thought to live in the greater metropolitan area and its purported wealth and opportunities are drawing ever more people, in spite of restrictions – there is thought to be a floating population of at least 3 million. Shanghai’s vast population, industrial legacy and increasing car ownership makes for gridlocked streets, blackened rivers, smoggy skies and there are even reports that the city is sinking due to its gargantuan buildings. In this city of cell-phones, mega-malls, sleek cars and super-skyscrapers, there are still people living in abject poverty. As elsewhere in China, the greater the wealth, the bigger the social disparity.

The Future

This said, Shanghai is undeniably making progress and rags-to-riches stories are commonplace. Environmental problems are being addressed to some extent and Suzhou Creek is no longer quite as black and oily as it was, although it’s still a long way from its projected status as a beautiful riverside promenade. Economic growth and rising international prominence has brought infrastructural, cultural and social development. Reflecting this, Shanghai has been awarded the 2010World Expo. While under more direct government control than Hong Kong, Shanghai enjoys more social freedom than anywhere else on the mainland and is set to eclipse its southern rival in the coming decades. Shanghai works hard, but it plays hard too and it has once again become the place to shop, dine and drink to your heart’s content.