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Brief History of Shanghai


Shanghai in Brief

Shanghai city, in, but independent of, Jiangsu province, East China, on the Huangpu (Whangpoo) River where it flows into the Chang Jiang (Yangtze) estuary. It is an independent unit (2,400 sq mi/6,218 sq km) administered directly by the central government. One of the world's great seaports, Shanghai is China's largest city.

History of Shanghai, China.

The name Shanghai dates from the Sung dynasty (11th century), but the town, which became a walled city in the 16th century, was unimportant until it was opened to foreign trade by the Treaty of Nanjing in 1842. The ensuing Western influence launched the city on its phenomenal growth. The greater part of the city was incorporated into the British concession (1843), just north of the old walled city, and into the U.S. concession of Hongkew (1862). In 1863 the United States and Great Britain consolidated into the International Settlement the areas that had been conceded to them. The French, who had obtained a concession in 1849, continued it as a separate entity. The foreign zones, which were under extraterritorial administration, maintained their own courts, police system, and armed forces. Thus Shanghai until World War II was a divided city.

In 1927, Chiang Kai-shek, at the head of the Nationalist army and with the support of the Chinese Communists, captured Shanghai. The Chinese section was immediately placed under the Kuomintang government. Japan invaded and attacked the Chinese city in 1932 to force the government to break an unofficial boycott of Japanese goods. In Aug., 1937, as part of the Second Sino-Japanese War, the Japanese again attacked the Chinese city, and resistance was overcome in November. The foreign zones were occupied by the Japanese after December 7 1941.

In 1943 the United States and Great Britain renounced their claims in Shanghai, as did France in 1946. The city was restored to China at the end of World War II, and the Chinese central government for the first time gained control of the entire city. In May, 1949, it fell to the Communist forces. Since Pudong (East Shanghai) was declared (1990) a special development zone, government and foreign investment has revived Shanghai as an international trade and financial center.


The only large port of central China not cut off from the interior by mountains, it is the natural seaward outlet of, and the gateway to, the Chang Jiang basin, one of China's richest regions. It handles much of the country's foreign shipping and a large coastal trade. Great sums are expended to keep open its continually silting harbor. A submarine base is in the harbour. Although water transport is of prime importance, highways radiate outward, and there are rail connections with Nanjing and Hangzhou, with links through those cities to the North and South China networks. A new international airport opened in Pudong (East Shanghai) in 1999.

Despite a lack of fuel and raw materials, Shanghai is China's leading industrial city, with large steelworks; textile mills; shipbuilding yards; oil-refining, gas-extracting, and diamond-processing operations; and plants making light and heavy machinery, electrical, electronic, and computer equipment, machine tools, turbines, chemicals, pharmaceuticals, aircraft, tractors, motor vehicles, plastics, and consumer goods. The city is a major publishing center. Shanghai includes much of the surrounding rural area (over 2,000 sq mi/5,000 sq km); there farms produce the food crops that support the city's population.

In the 1970s and 80s, Shanghai's industrial base was shifted to include more light industries in order to reduce pollution. There was much rebuilding and expansion; new factories emerged around the outskirts of the city, and the northwest section was developed as an industrial district. Development in the 1990s concentrated on Pudong, an area formerly dominated by farms and marshland that was designated a special economic development zone. A project to divert much-needed water for the city from the Chang Jiang River into the Huangpu was completed in 1996. The 1990s also brought new bridges and tunnels and a subway system.


Shanghai Overview

Shanghai economic profile

Nowhere is China’s continuing transformation from Communist backwater to economic powerhouse more visible than in Shanghai. Fifteen years ago, its streets were filled with workers in drab blue Mao suits, silently pushing identical black bicycles down derelict streets. Shops spread the few goods they stocked across bare shelves and there was so little to do that the city was asleep by early evening. Today, Shanghai is wide awake at every hour, seething with energy, noise and unbelievable traffic. Foreign labels in glittering shops entice China’s newly wealthy, while the skyline is dotted with futuristic skyscrapers. It is often the tourists who feel badly dressed.

During the early part of the 20th century, Shanghai (known then as the “Paris of the Orient”) was China’s most important and cosmopolitan city — and consequently suffered badly under the Communists, particularly during the Cultural Revolution. When Deng Xiaoping started China on its path to reform at the end of the 1970s, following the death of Mao Zedong, he chose Guangdong province in the south, far away from the centre of power, for his experiment. Shenzhen, bordering Hong Kong, became the country’s first modern city.

It was only in 1992, during the second wave of reform and opening that followed the crackdown after Tiananmen Square, that Shanghai got the chance to reclaim its pre-eminence as China’s most international city. That was because the top leadership (many by then hailing from Shanghai, like the future president Jiang Zemin) wanted to shift China’s economic future away from the pernicious influence of a free-thinking Hong Kong.

Shanghai’s government seized the opportunity with both hands. In the ensuing decade, it built a new road and rail system, countless office blocks and hotels, and turned Pudong — on the east bank of the Huangpo River — from marshland flats and abandoned factories into a neon-lit metropolis. With the futuristic Oriental Pearl TV Tower as its landmark, Pudong is linked to the new international airport by the underused maglev rail link — the fastest train in the world, which takes just over seven minutes to travel 19 miles at a top speed of 270 mph from the airport to eastern Pudong.

Since China joined the World Trade Organisation in 2001, Shanghai has become one of the principal locations for foreign companies hoping to benefit from the opening of China's markets. By 2003, Pudong alone had attracted over $20 billion in foreign investment.

Shanghai is the world’s third-largest container-shipping port (behind Hong Kong and Singapore and ahead of Shenzhen): in 2003 it handled 11.37m 20-foot equivalent units, nearly double that of 2001. Booming property prices (prices climbed 18% in 2004, and the pace of demolitions of older areas to aid development has led to supply shortages) are a source of official concern. A State Council report in March 2005 stressed the government’s determination to clamp down on this potential source of inflation and social instability. Interest rates are on the increase and state-owned banks are under pressure to be more cautious in their lending.

Tourism is climbing. Official figures estimated 3.5m international and 95m domestic visitors in 2004 (although counting methods make it hard to distinguish between transit passengers and actual visitors). Trade fairs and conventions give hotels no shortage of custom even outside peak season. The city hosted a Formula One Grand Prix race for the first time in 2004, and will host the World Expo in 2010.

Shanghai is China’s leading industrial centre, with much of the manufacturing inside the city’s free-trade and export-processing zones. Products include machinery, electronics consumer goods, textiles, chemicals and petrochemicals. The city’s stockmarket is one of China’s two trading floors (the other is Shenzhen), though both bourses have suffered from declining share prices over the past several years. In February 2005, domestic A-share indices hit their lowest levels for over five years: investors seem to prefer to put their savings into property. To address the problem, China’s rulers are planning wide-ranging capital-market reforms.

China's wealthiest city, with more than 6,000 skyscrapers, has its problems. Like the rest of the country, it suffers from poorly regulated property markets, a weak rule of law, widespread official corruption and a rickety financial system. The state remains the majority owner of most big companies. Soil and water pollution is a cause for growing concern: although the city sits near the junction of the Yangtze and Huangpu rivers, it has one of the lowest ratios of drinkable water to people in China. Han Zhen, Shanghai's mayor, is addressing the issue. Shanghai's aging population is another worry: 11.5% of its citizens are over 65 (the highest level in China). That eternal curse of a fast-growing urban economy — traffic congestion — is also huge, and growing, despite a fast and efficient subway system and big investments in transport improvements.


Shanghai - historical background

First light

Shanghai emerged more than 700 years ago as a shipping town on the murky delta formed by the Yangtze River and one of its tributaries, the Huangpu. Farmers produced cotton from the region's marshy fields for a booming local weaving industry. By the end of 17th century, this was a small, prosperous walled settlement of about 50,000 inhabitants. But it was foreign rather than local trade that heralded the city's ultimate rise.

From the mid-1700s, British ships started smuggling Indian-grown opium into China. One of the biggest traffickers was William Jardine, a former surgeon in the British East India Company. Known as “Iron-headed Old Rat” for calmly taking blows to the head while awaiting an audience with a Cantonese bureaucrat, Jardine joined with James Matheson, a fellow Scot. Together they established Jardine Matheson, with headquarters in Shanghai.

The Treaty of Nanjing changed the face of Shanghai, hitherto an almost exclusively Chinese city. Settlements controlled by foreign consuls sprang up: a French concession on marshland just outside the old walled city and a British settlement along the muddy waterfront (renamed the “Bund”, a Hindi word meaning “embankment”). Although the number of foreigners was small, by the 1850s their businesses in effect controlled Shanghai — a fact clearest on the Bund, which was transformed into a European-style boulevard lined with Italianate and neoclassical buildings.

Rebel, rebel

Shanghai's budding foreign settlements were reshaped by the Taiping Rebellion, a nationwide revolt against China's emperor. In 1853, a branch of the rebels known as the “Small Swords” captured the Chinese areas of Shanghai for 18 months. The rebels returned in 1860, and were finally beaten by British, French and Qing troops. Waves of refugees fleeing the violence in China's interior arrived in Shanghai. Their influx fuelled a real-estate boom.

Since 1845, Chinese had been barred from living in the foreign settlements. But now that their demand for housing was pushing prices up from £75 per acre to an astonishing £12,000, their money was welcomed. Development spread outwards from the Bund and into the hills. The Chinese population in the settlements grew from 500 in 1850 to 70,000 in 1872. Taxes from the newcomers funded an impressive new infrastructure: the city got telephones in 1881, electricity in 1882 and an electric tram in 1908.

The after-effects of the rebellion also included the creation of an International Settlement, north of the French concession, made up of British and Americans, and governed by the foreign-controlled Shanghai Municipal Council.

More foreign influence was to come from the Japanese. In 1895, after a humiliating defeat in the war with Japan, the Chinese signed the Treaty of Shimonoseki, giving it trading rights and permitting it to open factories in Shanghai.

Fierce competition among foreign powers for Shanghai's bounty was both a blessing and a curse. The city now had powerful protectors to shelter it from war, but the Shanghainese faced gruelling work for low wages, heavy foreign taxes and exclusion from the city's political life. Such conditions provided the perfect breeding ground for radicalism.

Shanghai's burgeoning political consciousness was led by students influenced by Russia's Communist revolution. In 1921 Mao Zedong helped found the Chinese Communist Party (CCP); its inaugural meeting was held in a girls' school in the French concession. In 1925, after police shot to death 11 people in a student demonstration, the Shanghai Trade Union (allied with the CCP) called a strike that crippled foreign businesses and forced the near-closure of the International Settlement. The May 30th Movement spread through the country. The Shanghai Municipal Council eventually broke the strike, but anti-foreign feeling continued to roil the Chinese population.


When Sun Yat-sen died in 1925, leadership of his national party, the Kuomintang, was assumed by Chiang Kai-shek. Chiang's mission to evict foreigners and unify China created an uneasy alliance between his army and the Communists. In 1927 20,000 Kuomintang troops marched on Shanghai, ostensibly to seize power from the local warlord, Sun Chaun-fang.

Chiang Kai-shek placed Big-eared Du, Shanghai's most notorious drug baron, in charge of his opium-suppression bureaus. Du, thanks to his connections with Chiang and copious bribes to police, controlled the French concession. His good luck charms included dried monkey heads, which he wore in the folds of his robes.

Chiang actually intended to push aside his Communist allies. Financed by Shanghai's bankers, he hired local gangsters and disguised them as Kuomingtang soldiers. The Communist worker's militia had declared a strike to support Chiang's takeover of Shanghai, but he ordered his troops to fire on them. Some 5,000 people were killed, and in a three-week “White Terror”, Chiang ordered the execution of 12,000 suspected Communists. Zhou Enlai, the Communist leader, fled to Wuhan, leaving Shanghai to the warlords, the Kuomintang and the foreign firms that subsidised them both.

Despite the country's political unease, Shanghai was prospering: 48,000 foreigners from 50 countries lived there (in addition to as many as 50,000 White Russians), and many businesses were booming. The city's wealth was best symbolised by the 12-storey Cathay Hotel, completed in 1929 by Victor Sassoon, a wealthy Baghdadi Jew whose buildings dotted the Bund. It was Shanghai's highest building, and inside the Art Deco interiors were flecked with Lalique glass.

“If God allows Shanghai to endure, he will owe Sodom and Gomorrah an apology,” said one missionary

The city's pleasure industry was also at its zenith — nightclubs, racecourses and country clubs flourished; one in 130 women in Shanghai was a prostitute. Said one missionary at the time: “If God allows Shanghai to endure, he will owe Sodom and Gomorrah an apology.”

But the lives of Shanghai's foreigners were far removed from the crushing poverty of the city's 3m Chinese. Living conditions in much of Shanghai were squalid: in 1934, local life expectancy was 27. Workers were often killed by lead or mercury in factories, and their bodies thrown on the street. In 1926, Alduous Huxley noted that “the spectacle of [Shanghai] inspires something like terror.”

That same period saw a rapidly growing Japanese presence in the city: before the Treaty of Shimonoseki, the Japanese population stood at less than 400, but by the 1930s it was in the tens of thousands, surpassing even the British. For them, life was cloistered in the dense weave of Japanese schools and businesses in “Little Tokyo”. Though the area was rarely visited by other foreigners, Japan's influence was hard to miss. It held two of the Municipal Council's fourteen seats, and the Japanese owned more factories than foreigners from any other country.

Japan's ambitions were growing. The civil war between the Kuomintang and the Communists weakened China, and in 1931 Japan, seizing an opportunity, invaded Manchuria. Anti-Japanese protests broke out in Shanghai. After sending in 20,000 troops to quell them, Japan bombed Zhabei in 1932, forcing 600,000 Chinese refugees into the settlements and leaving 14,000 dead.

In 1937, Japanese forces occupied the city as the Sino-Japanese war broke out. From Shanghai, Japan took the Yangtze Valley and then invaded China's interior. With its port choked off and its factories and businesses destroyed, Shanghai's precipitous decline began. In 1941, the Japanese forced the British into prisoner camps, and took over the International Settlement.

After Japan was defeated by the Allies in 1945, Shanghai was left without a reconstruction plan that could curb rampant inflation, or build up the tiny, scattered workshops that sprung up after the war. By 1949, the vital independence — and massive foreign presence — that had previously defined the city had faded. The Communists, led by Mao Zedong, seized Shanghai and Chiang Kai-shek fled to Taiwan, taking with him all of China's gold reserves and the remainders of its air force and navy.


Shanghai may have been the birthplace of Chinese Communism, but for Mao the city was the ultimate symbol of foreign decadence. It was therefore a fitting launchpad for the Cultural Revolution of 1966, aimed at ridding China of the “four olds” (old customs, old habits, old culture and old thinking). A personality cult sprang up around Mao, and posters of him covered the city. Shanghainese who had contacts with foreigners were forced to wear dunce caps and submit to long sessions of public humiliation by Communist cadres. The city's 200,00 opium addicts were forced to detox, and some 30,000 prostitutes were placed in re-education programmes. Hundreds of thousands of Shanghai's workers attended daily sessions in doctrine. Shanghai also suffered from Mao's attempts to redistribute its industries to China's interiors — between 1966 and 1970, 1m young Shanghainese were relocated to the countryside.

Mao's death ended the Cultural Revolution in 1976; the Gang of Four was arrested and Deng Xiaoping assumed control in 1978, promising country-wide economic reforms. The city struggled over the next decade: little investment trickled in, and what money was being made largely went to Beijing. Political reforms remained out of the question — after the Tiananmen Square massacre, tanks rolled into Shanghai's Renmin Square and demonstrators were later shot in public.

Yet in 1992, even as the city seemed doomed to become a chastened symbol of Communist reformation, Shanghai was marked for a series of economic liberalisations aimed at turning the city into Asia's financial hub. China's leaders (many of whom hailed from Shanghai, like Jiang Zemin) decided to shift China’s economic future away from the pernicious influence of free-thinking Hong Kong.

The policies have remade the city in ways as obvious as the construction cranes that tower on the skyline. Nowhere is China’s continuing transformation from Communist backwater to economic powerhouse more visible than in Shanghai. Sweeping capital improvements include new roads, metro lines, buildings, bridges, the $2 billion international airport in Pudong and the fastest train in the world, hurtling from the airport to the city at 267 miles per hour.

As Shanghai grows, its main competitor remains Hong Kong, which prospered under British stewardship. Though Shanghai's per capita GDP still lags by two decades, the city's double digit growth over the last few years is a striking contrast to Hong Kong's wobbling economy.

Hong Kong may yet reassert itself, but Shanghai will benefit from its political ties to Beijing and unofficial support from the nation's leadership. By 2010, when the World Expo is scheduled to visit the city, the 2008 Olympics in Beijing may have been a prelude to Shanghai's new golden age.