History of Shanghai
Encyclopedia
The history of Shanghai, spanning over a thousand years, closely parallels the development of modern China. Originally a small agricultural village, Shanghai developed during the late Qing Dynasty
Qing Dynasty
The Qing Dynasty was the last dynasty of China, ruling from 1644 to 1912 with a brief, abortive restoration in 1917. It was preceded by the Ming Dynasty and followed by the Republic of China....

 as one of China's principal trading ports. Since economic reforms reached it during the early 1990s, it has burgeoned to become one of Asia's financial centers and the busiest container port
World's busiest port
The world's busiest port is contested by several ports around the world, as there is as yet no standardised means of evaluating port performance and traffic. For the past decade, the distinction has been claimed by both the Port of Rotterdam and the Port of Singapore...

 in the world.

Early Era

Founded in the 10th century, the city was located in a swampy area east of Suzhou
Suzhou
Suzhou , previously transliterated as Su-chou, Suchow, and Soochow, is a major city located in the southeast of Jiangsu Province in Eastern China, located adjacent to Shanghai Municipality. The city is situated on the lower reaches of the Yangtze River and on the shores of Taihu Lake and is a part...

. Until 1127, Shanghai was a small market town of 12,000 households. That year, however Kaifeng
Kaifeng
Kaifeng , known previously by several names , is a prefecture-level city in east-central Henan province, Central China. Nearly 5 million people live in the metropolitan area...

 was conquered and many refugees came to Shanghai. As a result, the city soon grew to 250,000 inhabitants.

The Shanghai region became one of China's most prosperous in the 13th century, after becoming a cotton production and manufacturing center. The processing of cotton utilized a cotton gin
Cotton gin
A cotton gin is a machine that quickly and easily separates cotton fibers from their seeds, a job formerly performed painstakingly by hand...

 similar to that created by American Eli Whitney
Eli Whitney
Eli Whitney was an American inventor best known for inventing the cotton gin. This was one of the key inventions of the Industrial Revolution and shaped the economy of the Antebellum South...

. Cotton production and textile milling were the backbone of Shanghai's economy until the early 19th century. The construction of canals, dikes, and real estate development financed by private capital flourished during the Song dynasty
Song Dynasty
The Song Dynasty was a ruling dynasty in China between 960 and 1279; it succeeded the Five Dynasties and Ten Kingdoms Period, and was followed by the Yuan Dynasty. It was the first government in world history to issue banknotes or paper money, and the first Chinese government to establish a...

.

Ming Dynasty

The Ming dynasty
Ming Dynasty
The Ming Dynasty, also Empire of the Great Ming, was the ruling dynasty of China from 1368 to 1644, following the collapse of the Mongol-led Yuan Dynasty. The Ming, "one of the greatest eras of orderly government and social stability in human history", was the last dynasty in China ruled by ethnic...

 imposed tight trade restrictions in the 16th century to guard against the Wokou
Wokou
Wokou , which literally translates as "Japanese pirates" in English, were pirates of varying origins who raided the coastlines of China and Korea from the 13th century onwards...

. Because of those restrictions all foreign trade came to an end. After a hundred merchants died when Shanghai was pillaged by pirates, the Ming government evacuated the entire coastal population to the interior. In 1554, a wall was built to protect the city from future invasions.

Qing Dynasty

During the late Qing Dynasty
Qing Dynasty
The Qing Dynasty was the last dynasty of China, ruling from 1644 to 1912 with a brief, abortive restoration in 1917. It was preceded by the Ming Dynasty and followed by the Republic of China....

, Shanghai's economy began to rival the traditionally larger market at Suzhou
Suzhou
Suzhou , previously transliterated as Su-chou, Suchow, and Soochow, is a major city located in the southeast of Jiangsu Province in Eastern China, located adjacent to Shanghai Municipality. The city is situated on the lower reaches of the Yangtze River and on the shores of Taihu Lake and is a part...

, with 18th- and early 19th-century exports of cotton, silk, and fertilizer reaching as far as Polynesia
Polynesia
Polynesia is a subregion of Oceania, made up of over 1,000 islands scattered over the central and southern Pacific Ocean. The indigenous people who inhabit the islands of Polynesia are termed Polynesians and they share many similar traits including language, culture and beliefs...

 and Persia.

Shanghai grew still more rapidly following its inclusion as a treaty port
Treaty ports
The treaty ports was the name given to the port cities in China, Japan, and Korea that were opened to foreign trade by the Unequal Treaties.-Chinese treaty ports:...

 in the 1842 Treaty of Nanjing that ended the First Opium War
First Opium War
The First Anglo-Chinese War , known popularly as the First Opium War or simply the Opium War, was fought between the United Kingdom and the Qing Dynasty of China over their conflicting viewpoints on diplomatic relations, trade, and the administration of justice...

. The British felt the city's close proximity to the mouth of the Yangtze River
Yangtze River
The Yangtze, Yangzi or Cháng Jiāng is the longest river in Asia, and the third-longest in the world. It flows for from the glaciers on the Tibetan Plateau in Qinghai eastward across southwest, central and eastern China before emptying into the East China Sea at Shanghai. It is also one of the...

 but distance from the Chinese fortifications at Jingjiang
Jingjiang
Jingjiang is a county-level city in China's Jiangsu province. It is located on the northern bank of the Yangtze river. Originally belonging to Yangzhou city, Jingjiang was transferred to Taizhou city in 1996...

 made it an ideal location for trade with the surrounding region and interior.

The Qing Dynasty
Qing Dynasty
The Qing Dynasty was the last dynasty of China, ruling from 1644 to 1912 with a brief, abortive restoration in 1917. It was preceded by the Ming Dynasty and followed by the Republic of China....

, having little government control, deferred regional powers to native place associations. These associations used their provincial networks to control the city. Bankers of different native place associations started cooperating with each other through the Shanghai Native Bankers Guild, which used a democratic decision-making process.

At the same time, several non-trade-related organizations emerged in an attempt to assert more neutral control over the city. Among those groups were the Tong Reng Tan and the Self-Strengthening Movement
Self-Strengthening Movement
The Self-Strengthening Movement , c 1861–1895, was a period of institutional reforms initiated during the late Qing Dynasty following a series of military defeats and concessions to foreign powers....

. The Tong Reng Tan succeeded in establishing a measure of control over the city but was abolished in 1905 and replaced by the Shanghai municipal government. Later a native place association came into being called the Tongrengtang Tongxianghui.

The Self-Strengthening Movement
Self-Strengthening Movement
The Self-Strengthening Movement , c 1861–1895, was a period of institutional reforms initiated during the late Qing Dynasty following a series of military defeats and concessions to foreign powers....

 was an organized attempt to adopt Western practices, including the rule of law and business conventions, as a way to improve economic conditions throughout the country. However, incompetence, corruption, and inefficiency of some leading participants caused those efforts to fail.

First Opium War

During the First Opium War
First Opium War
The First Anglo-Chinese War , known popularly as the First Opium War or simply the Opium War, was fought between the United Kingdom and the Qing Dynasty of China over their conflicting viewpoints on diplomatic relations, trade, and the administration of justice...

, British forces temporarily held Shanghai. The war ended with the 1842 Treaty of Nanjing, which opened five treaty ports
Treaty ports
The treaty ports was the name given to the port cities in China, Japan, and Korea that were opened to foreign trade by the Unequal Treaties.-Chinese treaty ports:...

including Shanghaito international trade. Opium
Opium
Opium is the dried latex obtained from the opium poppy . Opium contains up to 12% morphine, an alkaloid, which is frequently processed chemically to produce heroin for the illegal drug trade. The latex also includes codeine and non-narcotic alkaloids such as papaverine, thebaine and noscapine...

, despite its continued illegality, remained the biggest import during this period, carried by smugglers such as Jardine, Matheson, & Co. However, cheap imported cottongrown in the American South
King Cotton
King Cotton was a slogan used by southerners to support secession from the United States by arguing cotton exports would make an independent Confederacy economically prosperous, and—more important—would force Great Britain and France to support the Confederacy because their industrial economy...

 and processed in British mills
Textile manufacture during the Industrial Revolution
The industrial revolution changed the nature of work and society. Opinion varies as to the exact date, but it is estimated that the First Industrial Revolution took place between 1750 and 1850, and the second phase or Second Industrial Revolution between 1860 and 1900. The three key drivers in...

essentially destroyed the cotton industry of Shanghai. The 1843 Anglo-Chinese
Anglo-Chinese relations
British–Chinese relations , also known as Sino-British relations and Anglo-Chinese relations, refers to the interstate relations between China and the United Kingdom. Although on opposing sides of the Cold War, both countries were allies during World War II, and are members of the UN...

 Treaty of the Bogue
Treaty of the Bogue
The Treaty of the Bogue was an agreement between China and the United Kingdom, which was concluded in October 1843 in order to supplement the previous Treaty of Nanking...

 and the 1844 Sino-American
Sino-American relations
For the article on U.S.-Taiwan relations, see Republic of China – United States relations.Sino-American or People's Republic of China–United States relations refers to international relations between the United States of America and the government of People's Republic of China...

 Treaty of Wanghia
Treaty of Wanghia
The Treaty of Wanghia , is a diplomatic agreement between the Qing Dynasty of China and the United States, signed on 3 July 1844 in the Kun Iam Temple...

 saw foreign nationals achieve extraterritoriality
Extraterritoriality
Extraterritoriality is the state of being exempt from the jurisdiction of local law, usually as the result of diplomatic negotiations. Extraterritoriality can also be applied to physical places, such as military bases of foreign countries, or offices of the United Nations...

 on Chinese soil. These "Unequal Treaties" lasted until the Japanese occupation of China before being formally ended in 1943.

Taiping Rebellion

The Taiping Rebellion
Taiping Rebellion
The Taiping Rebellion was a widespread civil war in southern China from 1850 to 1864, led by heterodox Christian convert Hong Xiuquan, who, having received visions, maintained that he was the younger brother of Jesus Christ, against the ruling Manchu-led Qing Dynasty...

 broke out in December 1850. In 1853, Shanghai was occupied by a triad offshoot of the rebels called the Small Swords Society
Small Swords Society
Small Swords Society was a political and military organisation active in Shanghai, China and neighbouring areas during the Taiping Rebellion....

. The fighting devastated the countryside but left foreign settlements untouched. Forbidden to live in the foreign settlements, many Chinese fled into them regardless. Circumstances led to new regulations being drawn up in 1854, making land available to the Chinese within the extraterritorial areas. Land prices rose substantially, and real estate development became a source of considerable income for the Shanghailander
Shanghailander
ShanghailandersSometimes "Shanghighlanders" in punning reference to the Scottish highlanders. were foreignprincipally European and Americansettlers in the extraterritorial areas of Shanghai, China, between the 1842 Treaty of Nanjing and the mid-20th century....

s, further increasing the westerners' grip over the city's economy. And had been raised the Battle of Shanghai (1861)
Battle of Shanghai (1861)
The Battle of Shanghai was a major engagement of the Taiping Rebellion that occurred from June 1861 to July 1862. British and French troops used modern artillery on a large scale for the first time in China...

.

Shanghailanders

In 1846, Peter Richards
Peter Felix Richards
Peter Felix Richards was a prominent pioneer nineteenth-century Scottish merchant in post-Treaty of Nanjing Shanghai, and the founder of the Richards Hotel and Restaurant, the first foreign hotel in China, and the forerunner to the Astor House Hotel....

 founded Richards' Hotel, the first western hotel in China. It would later become the Astor House.

1854 marked the first annual meeting of the Shanghai Municipal Council, created in order to manage the foreign settlements excepting the French, who opted instead to maintain their own separate concession
Shanghai French Concession
The Shanghai French Concession was a foreign concession in Shanghai, China from 1849 until 1946, and it was progressively expanded in the late 19th and early 20th centuries. The concession came to an end in practice in 1943 when the Vichy French government signed it over to the pro-Japanese puppet...

 to the west of the old town.

In 1863, the British concession between the old town and Suzhou Creek
Suzhou Creek
Suzhou Creek is a river in China that passes through the Shanghai city centre. It is named after Suzhou, a city in neighbouring Jiangsu province which was the predominant city in this area prior to the rise of Shanghai as a metropolis.One of the principal outlets of Lake Tai, Suzhou Creek has a...

 and the unofficial American concession to the northeast joined to form the International Settlement
Shanghai International Settlement
The Shanghai International Settlement began originally as a purely British settlement. It was one of the original five treaty ports which were established under the terms of the Treaty of Nanking at the end of the first opium war in the year 1842...

. Its waterfront became the internationally-famous Bund
Bund
- Organizations :* German American Bund, a pro-Nazi pre-World War II organisation* General Jewish Labour Bund in Lithuania, Poland and Russia, a political party founded in the Russian Empire* General Jewish Labour Bund in Poland, a political party founded in Poland...

.

Jardine's attempt to construct the Woosung "Road" railway in 1876China's firstproved initially successful until the death of a soldier on the tracks prompted the Chinese government to demand its nationalization
Nationalization
Nationalisation, also spelled nationalization, is the process of taking an industry or assets into government ownership by a national government or state. Nationalization usually refers to private assets, but may also mean assets owned by lower levels of government, such as municipalities, being...

. Upon the last payment in 1877, the local viceroy
Viceroy of Liangjiang
The Viceroy of Liangjiang , fully referred to as the Governor General of the two Yangtze Provinces and surrounding areas; Overseeing Military Affairs, Food Production; Manager of Waterways; Director of Civil Affairs , was one of eight regional viceroys in China proper during the Qing Dynasty of China...

 ordered the profitable railway dismantled and removed to Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...

. The telegraph that had been strung along the line of the railwayalso China's firstwas, however, allowed to remain in operation.

First Sino-Japanese War

The First Sino-Japanese War
First Sino-Japanese War
The First Sino-Japanese War was fought between Qing Dynasty China and Meiji Japan, primarily over control of Korea...

 of 1894–95 was a conflict over control of the Korean Peninsula
Korea
Korea ) is an East Asian geographic region that is currently divided into two separate sovereign states — North Korea and South Korea. Located on the Korean Peninsula, Korea is bordered by the People's Republic of China to the northwest, Russia to the northeast, and is separated from Japan to the...

. The Treaty of Shimonoseki
Treaty of Shimonoseki
The Treaty of Shimonoseki , known as the Treaty of Maguan in China, was signed at the Shunpanrō hall on April 17, 1895, between the Empire of Japan and Qing Empire of China, ending the First Sino-Japanese War. The peace conference took place from March 20 to April 17, 1895...

 which ended it saw Japan emerge as an additional foreign power in Shanghai. Japan built the first factories in Shanghai, which were soon followed by other foreign powers. The Chinese defeat also spurred reformers within the Qing government to modernize more quickly, leading to the reëstablishment of the Songhu Railway and its expansion into the Shanghai–Nanjing Railway.

Republic of China

The 1911 Xinhai Revolution
Xinhai Revolution
The Xinhai Revolution or Hsinhai Revolution, also known as Revolution of 1911 or the Chinese Revolution, was a revolution that overthrew China's last imperial dynasty, the Qing , and established the Republic of China...

, spurred in part by actions against the native-owned railways around Shanghai, led to the establishment of the Republic of China. During that time, Shanghai became the focal point of many activities that would eventually shape modern China.

In 1936, Shanghai was one of the largest cities in the world with 3,000,000 inhabitants. Of those, only 35,000 were foreigners, but these controlled half the city. Many White Russians
White Emigre
A white émigré was a Russian who emigrated from Russia in the wake of the Russian Revolution and Russian Civil War, and who was in opposition to the contemporary Russian political climate....

 fled to Shanghai after the 1917 Revolution
Russian Revolution
Russian Revolution can refer to:* Russian Revolution , a series of strikes and uprisings against Nicholas II, resulting in the creation of State Duma.* Russian Revolution...

about 25,000 remained by the 1930s. These Shanghai Russians
Shanghai Russians
The Shanghai Russians were a sizable Russian diaspora that flourished in Shanghai, China between the World Wars. By 1937 it is estimated that there were as many as 25,000 anti-Bolshevik Russians living in the city, the largest European group by far...

 were poorly regarded, as their general poverty led them to take jobs considered unsuitable for Europeans, including prostitution.

The city was thus divided between its more European western half and the more traditionally Chinese eastern half. New inventions like electricity and trams were quickly introduced, and westerners helped transform Shanghai into a metropolis. British and American businessmen made a great deal of money in trade and finance, and Germans used Shanghai as a base for investing in China. Shanghai accounted for half of the imports and exports of China. The western part of Shanghai was four times larger than the Chinese part in the early 20th century.
European and American inhabitants of Shanghai called themselves the Shanghailander
Shanghailander
ShanghailandersSometimes "Shanghighlanders" in punning reference to the Scottish highlanders. were foreignprincipally European and Americansettlers in the extraterritorial areas of Shanghai, China, between the 1842 Treaty of Nanjing and the mid-20th century....

s. After problems during its initial few years, the Public Garden
Public Garden
Public Garden is the second mini-album by Dragon Ash; released in 1997. Realism II was used as the theme for Asahi National Broadcasting Co.'s "Sports Spotters" show.-Track listing:#"Realism II" – 2:55#"Ability → Normal" – 3:05...

 north of the BundChina's first public park and today's Huangpu Park
Huangpu Park
Huangpu Park is the name of the triangular stretch of green at the northern end of the Bund in Shanghai, the oldest and smallest park of the city...

was for decades reserved for the foreign nationals and forbidden to Chinese natives. The International Settlement was built in the British style with a large racetrack at the site of today's People's Square
People's Square (Shanghai)
People's Square is a large public square adjacent to Nanjing Road in the Huangpu District of Shanghai, China. People's Square is the site of Shanghai's municipal government headquarter building, and is used as the standard reference point for measurement of distance in the Shanghai...

. A new class emerged, the compradors, which mixed with the local landlords to form a new class, a Chinese bourgeoisie. The compradors were indispensable mediators for the western companies. Many compradors were on the leading edge of the movement to modernize China. Shanghai was then the biggest financial city in East Asia.

Chinese society

Chinese society was divided into native place associations or provincial guilds. These guilds defended the interests of traders from shared hometowns. They had their own dress codes and sub-cultures. Chinese government was hardly organized. Instead, society was controlled by the native place associations. The Guangdong
Guangdong
Guangdong is a province on the South China Sea coast of the People's Republic of China. The province was previously often written with the alternative English name Kwangtung Province...

 native place associations represented the skilled workers of Shanghai. These native place associations belonged to the top of Shanghainese society. The Ningbo
Ningbo
Ningbo is a seaport city of northeastern Zhejiang province, Eastern China. Holding sub-provincial administrative status, the municipality has a population of 7,605,700 inhabitants at the 2010 census whom 3,089,180 in the built up area made of 6 urban districts. It lies south of the Hangzhou Bay,...

 and Jiangsu
Jiangsu
' is a province of the People's Republic of China, located along the east coast of the country. The name comes from jiang, short for the city of Jiangning , and su, for the city of Suzhou. The abbreviation for this province is "苏" , the second character of its name...

 native place associations were the most numerous. They represented the common workers. Many Shanghainese came from the north of China. They were on the bottom rung of the social ladder. Many of them were forced to work as seasonal workers or mobsters.

Shanghai Grand

During this period, Shanghai was known as "The Paris of the East, the New York of the West". Shanghai was made a special city
Special city
Special city refers to* Special cities of Korea* Special cities of Japan* Special wards of Tokyo* Special cities of China are now known as the municipalities of China...

 in 1927, and a municipality in May 1930. The city's industrial and financial power increased, because the merchants were in control of the city, while the rest of China was divided among warlords
Warlord era
The Chinese Warlord Era was the period in the history of the Republic of China, from 1916 to 1928, when the country was divided among military cliques, a division that continued until the fall of the Nationalist government in the mainland China regions of Sichuan, Shanxi, Qinghai, Ningxia,...

.

Artistically, Shanghai became the hub for three new art forms: Chinese cinema, Chinese animation
Chinese animation
Chinese animation or Manhua Anime, in narrow sense, refers to animations that are made in China. In broad sense, it may refers to animations that are made in any Chinese speaking countries such as People's Republic of China , Republic of China , Hong Kong, Singapore, Malaysia, etc.- History :The...

, and Chinese popular music. Other forms of entertainment included Lianhuanhua
Lianhuanhua
Lianhuanhua is a palm-size picture book of sequential drawings found in China in the early 20th century....

 comic books.

The architectural style at the time was modeled after British and American design. Many of the grandest-scale buildings on The Bund
The Bund
The Bund is a waterfront area in central Shanghai, People's Republic of China. The area centres on a section of Zhongshan Road within the former Shanghai International Settlement, which runs along the western bank of the Huangpu River, facing Pudong, in the eastern part of Huangpu District...

such as Shanghai Club
Shanghai Club Building
The Shanghai Club Building is a three-storey Baroque Revival building in Shanghai along The Bund. The club was originally named 'The Correspondent's Club'. It is currently part of the Waldorf-Astoria Hotel.-Structure:...

, the Asia Building
Asia Building, Shanghai
The six-storey Asia Building , also known as Mc Bain or Asiatic Petroleum building, is on the Bund in the Chinese city of Shanghai. It was built in 1916 for Royal Dutch Shell's Asiatic Petroleum division and later housed the Shanghai Metallurgical Designing & Research Institute.- References :* *...

 and the HSBC
Hongkong and Shanghai Banking Corporation
The Hongkong and Shanghai Banking Corporation Limited is a prominent bank established and based in Hong Kong since 1865 when Hong Kong was a colony of the British Empire. It is the founding member of the HSBC Group and since 1990 is now a wholly owned subsidiary of HSBC Holdings plc...

 buildingwere constructed or renovated at this time. The city created a distinct image that separated it from all other Chinese cities that had come before it.

Economic achievements include the city becoming the commercial
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...

 center of East Asia
East Asia
East Asia or Eastern Asia is a subregion of Asia that can be defined in either geographical or cultural terms...

, attracting banks from all over the world. When movies and literature depict the golden days of by-gone Shanghai, it is generally associated with this era.

Power struggle

The city was also the center of national and international opium smuggling during the 1920s. "The Great World" was a place where opium, prostitution and gambling came together. The Green Gang
Green Gang
The Green Gang was a Chinese criminal organization that operated in Shanghai in the early 20th century.-Origins:It was a secret society established originally by Fong Toh-tak of Shaolin Monastery to protect the Han Chinese who were oppressed by the Manchu rulers of the Qing Dynasty, and to restore...

 (Qing Bang) became a major influence in the Shanghai International Settlement
Shanghai International Settlement
The Shanghai International Settlement began originally as a purely British settlement. It was one of the original five treaty ports which were established under the terms of the Treaty of Nanking at the end of the first opium war in the year 1842...

, with the Commissioner of the Shanghai Municipal Police reporting that corruption associated with the trade had affected a large proportion of his force. An extensive crackdown in 1925 simply displaced the focus of the trade to the neighboring French Concession.

Meanwhile, traditional division of society by native place associations was falling apart. The new working classes were not prepared to listen to the bosses of the same native place associations during the 1910s. Resentment against the foreign presence in Shanghai rose among both the entrepreneurs and the workers of Shanghai. In 1919, protests by the May Fourth Movement
May Fourth Movement
The May Fourth Movement was an anti-imperialist, cultural, and political movement growing out of student demonstrations in Beijing on May 4, 1919, protesting the Chinese government's weak response to the Treaty of Versailles, especially the Shandong Problem...

 against the Treaty of Versailles
Treaty of Versailles
The Treaty of Versailles was one of the peace treaties at the end of World War I. It ended the state of war between Germany and the Allied Powers. It was signed on 28 June 1919, exactly five years after the assassination of Archduke Franz Ferdinand. The other Central Powers on the German side of...

 led to the rise of a new group of philosophers like Chen Duxiu
Chen Duxiu
Chen Duxiu played many different roles in Chinese history. He was a leading figure in the anti-imperial Xinhai Revolution and the May Fourth Movement for Science and Democracy. Along with Li Dazhao, Chen was a co-founder of the Chinese Communist Party in 1921. He was its first General Secretary....

 and Hu Shi who challenged Chinese traditionalism with new ideologies. Books like New Youth disseminated the new school of thought, while crime and warlord banditry convinced many that the existing government was largely ineffective. In this atmosphere, the Communist Party of China
Communist Party of China
The Communist Party of China , also known as the Chinese Communist Party , is the founding and ruling political party of the People's Republic of China...

 was founded in Shanghai in 1921.

In 1927, Communists tried to end foreign rule. The Nationalist
Kuomintang
The Kuomintang of China , sometimes romanized as Guomindang via the Pinyin transcription system or GMD for short, and translated as the Chinese Nationalist Party is a founding and ruling political party of the Republic of China . Its guiding ideology is the Three Principles of the People, espoused...

 leader Chiang Kai-shek
Chiang Kai-shek
Chiang Kai-shek was a political and military leader of 20th century China. He is known as Jiǎng Jièshí or Jiǎng Zhōngzhèng in Mandarin....

 and the Shanghailanders entered into an informal alliance with the Green Gang, which acted against the Communists and organized labor unions. The nationalists had cooperated with gang leaders since the revolution
Xinhai Revolution
The Xinhai Revolution or Hsinhai Revolution, also known as Revolution of 1911 or the Chinese Revolution, was a revolution that overthrew China's last imperial dynasty, the Qing , and established the Republic of China...

. Although sporadic fighting between gangsters and communists had occurred previously, many communists were killed in a major surprise attack during the April 12 Incident
April 12 Incident
The April 12 Incident of 1927 refers to the violent suppression of Chinese Communist Party organizations in Shanghai by the military forces of Chiang Kai-shek and conservative factions in the Kuomintang...

 in the Chinese-administered part of Shanghai. Suspected leftists were shot on sight, so manyincluding Zhou Enlai
Zhou Enlai
Zhou Enlai was the first Premier of the People's Republic of China, serving from October 1949 until his death in January 1976...

fled the city.

In the late 1920s and early '30s, large residential areas were built north of the foreign concessions. These residential areas were modern, with good roads and parking lots for automobiles. A new Chinese port was built, which could compete with the Shanghailanders' ports. Chiang Kai-shek continuously demanded large amounts of money from the financial world in Shanghai. Most bankers and merchants were willing to invest in the army, but this stopped in 1928. Chiang responded by nationalizing all enterprises. Soong, Chiang's brother-in-law, chastised his erstwhile relative, writing that it is better to strengthen the party and the economy as well instead of focusing only on the army.

Supported by the progressive native place associations, Chiang Kai-shek's rule turned increasingly autocratic. The power of the gangsters rose in the early 1930s, especially the power of the Green Gang
Green Gang
The Green Gang was a Chinese criminal organization that operated in Shanghai in the early 20th century.-Origins:It was a secret society established originally by Fong Toh-tak of Shaolin Monastery to protect the Han Chinese who were oppressed by the Manchu rulers of the Qing Dynasty, and to restore...

 leader Du Yuesheng
Du Yuesheng
Du Yuesheng , commonly known as "Big-Eared Du", was a Chinese gangster who spent much of his life in Shanghai. He was a key supporter of the Kuomintang and Chiang Kai-shek in their battle against the Communists during the 1920s, and was a figure of some importance during the Second Sino-Japanese...

 who started his own native place association. Chiang Kai-shek chose to cooperate with gangsters in order to maintain his grip on Chinese society. This meant that the gangsters remained middlemen during the rule of the nationalists, controlling society by frequently organizing strikes. Mobsters stormed the Shanghai Stock Exchange
Shanghai Stock Exchange
The Shanghai Stock Exchange , abbreviated as 上证所/上證所 or 上交所, is a stock exchange that is based in the city of Shanghai, China. It is one of the two stock exchanges operating independently in the People's Republic of China, the other is the Shenzhen Stock Exchange...

 to gain control over it. No one interfered: the police because they had been dominated by the mobsters since 1919, the Shanghailanders because it was an internal Chinese affair, and the nationalists because they were trying to break the power of the entrepreneurs. The entrepreneurs were forced to make a deal after a second raid.

End of Old Shanghai (1937–1945)

World War II and the Japanese Occupation

The Japanese Navy
Imperial Japanese Navy
The Imperial Japanese Navy was the navy of the Empire of Japan from 1869 until 1947, when it was dissolved following Japan's constitutional renunciation of the use of force as a means of settling international disputes...

 bombed Shanghai on January 28, 1932, nominally to crush Chinese student protests against the Japanese occupation of Manchuria. The Chinese fought back in what was known as the January 28 Incident
January 28 Incident
The January 28 Incident was a short war between the armies of the Republic of China and the Empire of Japan, before official hostilities of the Second Sino-Japanese War commenced in 1937.- Naming :...

. The two sides fought to a standstill and a ceasefire was brokered in May.

During the Second Sino-Japanese War
Second Sino-Japanese War
The Second Sino-Japanese War was a military conflict fought primarily between the Republic of China and the Empire of Japan. From 1937 to 1941, China fought Japan with some economic help from Germany , the Soviet Union and the United States...

, the city fell after the 1937 Battle of Shanghai
Battle of Shanghai
The Battle of Shanghai, known in Chinese as Battle of Songhu, was the first of the twenty-two major engagements fought between the National Revolutionary Army of the Republic of China and the Imperial Japanese Army of the Empire of Japan during the Second Sino-Japanese War...

 (known in China as the Battle of Songhu) and remained occupied until surrender of Japan
Surrender of Japan
The surrender of Japan in 1945 brought hostilities of World War II to a close. By the end of July 1945, the Imperial Japanese Navy was incapable of conducting operations and an Allied invasion of Japan was imminent...

 in 1945. Under Japanese rule, the foreign concessions remained intact until December 1941. Tensions within the city led to a wave of assassinations against Chinese officials who worked with the Japanese authorities: during January and February, 1939, 16 pro-Japanese officials and businessmen were assassinated by Chinese resistance organizations.

During World War II, its extraterritoriality made Shanghai a haven for visa-less European refugees. It was, along with Franco's Spain, the only location in the world unconditionally open to Jews
History of the Jews in China
Jews and Judaism in China have had a long history. Jewish settlers are documented in China as early as the 7th or 8th century CE, but may have arrived during the mid Han Dynasty, or even as early as 231 BCE. Relatively isolated communities developed through the Tang and Song Dynasties Jews and...

 at the time. However, under pressure from their ally
Axis Powers
The Axis powers , also known as the Axis alliance, Axis nations, Axis countries, or just the Axis, was an alignment of great powers during the mid-20th century that fought World War II against the Allies. It began in 1936 with treaties of friendship between Germany and Italy and between Germany and...

 Germany
Nazi Germany
Nazi Germany , also known as the Third Reich , but officially called German Reich from 1933 to 1943 and Greater German Reich from 26 June 1943 onward, is the name commonly used to refer to the state of Germany from 1933 to 1945, when it was a totalitarian dictatorship ruled by...

, the Japanese removed the Jews in late 1941 to what became known as the Shanghai ghetto
Shanghai ghetto
The Shanghai ghetto, formally known as the , was an area of approximately one square mile in the Hongkou District of Japanese-occupied Shanghai, to which about 20,000 Jewish refugees were relocated by the Japanese-issued Proclamation Concerning Restriction of Residence and Business of Stateless...

, where hunger and infectious diseases such as dysentery
Amoebic dysentery
Amoebic dysentery is a type of dysentery caused primarily by the amoeba Entamoeba histolytica. Amoebic dysentery is transmitted through contaminated food and water. Amoebae spread by forming infective cysts which can be found in stools, and spread if whoever touches them does not sanitize their...

 became rife. The foreign population rose from 35,000 in 1936 to 150,000 in 1942 mainly due to the Jews. The Japanese were still harsher on belligerent nationals: the British, Americans and Dutch
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...

. These slowly lost their privileges and had to wear lettersB, A, or Nwhen walking in public places. Their villas were turned into brothels and gambling houses. They were finally force-marched into concentration camps in 1943.

End of the Foreign Concessions

Following the attack on Pearl Harbor
Attack on Pearl Harbor
The attack on Pearl Harbor was a surprise military strike conducted by the Imperial Japanese Navy against the United States naval base at Pearl Harbor, Hawaii, on the morning of December 7, 1941...

, the Japanese ended all concessions in Shanghai save the French. This state of affairs was conceded by an Anglo-Chinese Friendship Treaty in 1943. The French themselves ceded their privileges in 1946 following the war.

In the years before the city was lost to the Communists, Du Yuesheng
Du Yuesheng
Du Yuesheng , commonly known as "Big-Eared Du", was a Chinese gangster who spent much of his life in Shanghai. He was a key supporter of the Kuomintang and Chiang Kai-shek in their battle against the Communists during the 1920s, and was a figure of some importance during the Second Sino-Japanese...

 tried to become the mayor of Shanghai, but he was forced to leave the city.

Tightened Communist rule (1949–1980s)

Communist Transition

On May 27, 1949, Shanghai came under Communist
Communist Party of China
The Communist Party of China , also known as the Chinese Communist Party , is the founding and ruling political party of the People's Republic of China...

 control. Despite Communist claims that the city was taken over in a "peaceful" manner, one of the first actions taken by the Communist party was to clean up the portion of the population that were considered counter-revolutionaries. Mass executions took place with thousands slaughtered. Places such as the Canidrome
Canidrome (Shanghai)
The Shanghai Cultural Plaza precinct is an area in Shanghai's Luwan District, in the former French Concession of Shanghai, China. The area began as the Canidrome , a stadium structure originally built for greyhound racing in 1928....

 were transformed from elegant ballrooms to mass execution facilities. This reality has been largely censored
Censorship in China
"Censorship in China" can refer to:*Censorship in the People's Republic of China*Censorship in the Republic of China, mainly in Taiwan province after 1949...

, despite numerous western texts describing the hostile takeover following the arrival of the People's Liberation Army
People's Liberation Army
The People's Liberation Army is the unified military organization of all land, sea, strategic missile and air forces of the People's Republic of China. The PLA was established on August 1, 1927 — celebrated annually as "PLA Day" — as the military arm of the Communist Party of China...

.

Most foreign firms moved their offices from Shanghai to Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

, specifically North Point
North Point
North Point is a mixed-use urban area in the Eastern District of Hong Kong. It is the northernmost point of Hong Kong Island, adjacent to both Causeway Bay and Quarry Bay, and projecting toward Kowloon Bay. Fortress Hill occupies the western end of the North Point area.-History:In 1899, The...

, whose Eastern District
Eastern District, Hong Kong
The Eastern District is one of the 18 districts of Hong Kong. It had a population of 587,690 in 2006. The district has the second highest population while its residents have the third highest median household income among 18 districts....

 became known as "Little Shanghai".

Home of leftism

Shanghai was, along with Beijing, the only former ROC municipality not merged into neighboring provinces over the next decade. Shanghai then underwent a series of changes in the boundaries of its subdivisions.

During the 1950s and 1960s, Shanghai became an industrial center and center for revolutionary leftism. The city regressed during the Maoist era. Shanghai remained the largest contributor of tax revenue to the central government
Central People's Government
The Central People's Government is the central government of the People's Republic of China in Beijing. According to the 1982 Constitution, "Central People's Government" is synonymous with the State Council.-History:...

, but this came at the cost of severely crippling Shanghai's infrastructure, capital, and artistic development. This also initially denied economic freedoms to the city that were later available to southern provinces such as Guangdong
Guangdong
Guangdong is a province on the South China Sea coast of the People's Republic of China. The province was previously often written with the alternative English name Kwangtung Province...

. During the mid-1980s, Guangdong province paid nearly no taxes to the central government and thus was perceived as fiscally expendable. Guangdong would benefit from economic reform under Deng Xiaoping
Deng Xiaoping
Deng Xiaoping was a Chinese politician, statesman, and diplomat. As leader of the Communist Party of China, Deng was a reformer who led China towards a market economy...

, while Shanghai would have to wait another decade until 1991.

Economic and cultural rebound (1990s–Present)

Although political power in Shanghai has traditionally been seen as a stepping stone to higher positions within the PRC central government, the city's modern transformation really did not begin until the third generation
Generations of Chinese leadership
Because both the Communist Party of China and the People's Liberation Army promote according to seniority, it is possible to discern distinct generations of Chinese leadership...

 president
President of China
The President of China can refer to:*President of the People's Republic of China...

 Jiang Zemin
Jiang Zemin
Jiang Zemin is a former Chinese politician, who served as General Secretary of the Communist Party of China from 1989 to 2002, as President of the People's Republic of China from 1993 to 2003, and as Chairman of the Central Military Commission from 1989 to 2005...

 came to power in 1992. Along with his premier Zhu Rongji
Zhu Rongji
Zhū Róngjī is a prominent Chinese politician who served as the Mayor and Party chief in Shanghai between 1987 and 1991, before serving as Vice-Premier and then the fifth Premier of the People's Republic of China from March 1998 to March 2003.A tough administrator, his time in office saw the...

, Jiang represented the politically right-of-center "Shanghai clique
Shanghai clique
The Shanghai clique or Shanghai faction is the name given to an informal group of officials in the Communist Party of China, especially those who serve in the central government of the People's Republic of China or the Central Committee of the Communist Party of China, who rose to prominence in...

" and began reducing the tax burden on Shanghai. Encouraging both foreign and domestic investment, he sought to promote the cityparticularly the Lujiazui
Lujiazui
Lujiazui is an important financial district in Pudong, Shanghai. In 2005 the State Council reaffirmed the positioning of the 31.78 km² Lujiazui area, as the only finance and trade zone among the 185 state-level development zones in mainland China.-Economy:...

 area of Pudong
Pudong
Pudong |Bank]]") is an area of Shanghai, China, located along the east side of the Huangpu River, across from the historic city center of Shanghai in Puxi. Formerly a little-developed agricultural area linked only by ferries, Pudong has grown rapidly since the 1990s and emerged as China's financial...

as the economic hub of East Asia and gateway to the Chinese interior. Since that time, Shanghai has led China's overall development and experienced continuous economic growth of between 9–15% annuallyarguably at the expense of Hong Kong.

Shanghai is China’s largest and greatest commercial and industrial city. With 0.1% of the land area of the country, it supplies over 12% of the municipal revenue and handles more than a quarter of total trade passing through China’s ports. Its year 2010 population, according to China's latest census, was 23.02 million and represented an increase of 6.61 million from the 2000 census.

The average size of a family in Shanghai declined to fewer than three people during the 1990s, and it is clear that most of Shanghai’s population growth is driven by migration rather than natural factors based on high birth and fertility rates. Shanghai has for many years had the lowest birth rate in China, a rate lower than large American cities such as New York.

As with most cities in China, Shanghai is overbounded in its administrative territory. The city in the year 2010 was composed of 16 districts and one county, together occupying 6340.5 sq km of land area. Chongming
Chongming
Chongming County is the only county under the jurisdiction of Shanghai, China. The county consists of three main islands: Chongming Island ; Changxing Island; and Hengsha Island. These are low-lying alluvial islands in the mouth of the Yangtze River. With an area of , Chongming Island is listed as...

 contains substantial rural land and a number of rural residents who continue to farm for their livelihood. The city has the highest population density of all the first-order administrative units in China, with 3630.5/km² (9402.9/sq mi) in 2010. Owing to its continued growth and industrial and commercial development, Shanghai also has the highest index of urbanization
Urbanization
Urbanization, urbanisation or urban drift is the physical growth of urban areas as a result of global change. The United Nations projected that half of the world's population would live in urban areas at the end of 2008....

 among all of China’s first order administrative units, with 89.3% of the official population (20.6 million) classified as urban.

The amount of building activity in Shanghai fueled by government investment expenditures continues to be astounding. Since the 1980s, Shanghai’s economy shifted from over 77% of gross domestic product in secondary sector manufacturing to a more balanced sectoral distribution of 48% in industry and 51% in services in 2000 and 2001. Employment
Employment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...

in manufacturing reached almost 60% in 1990 and has declined steadily since to 41% in 2001, while employment in the tertiary sector has grown from 30% in 1990 to more than 47% in 2001.

Following official approval for Protestant denominations in 1996, a 1999 campaign closed about 1000 Christian congregations, with a high amount of violence.

The rapid growth in population, factories and motor vehicles has generated environmental issues. Experts say the chief problems involve air and water pollution and the accumulation of solid wastes.
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