At its recent party congress, Beijing’s Communist leadership reaffirmed its commitment to a capitalist course. Although Hong Kong, newly returned to Chinese authority, is the country’s economic crown jewel, Shanghai, China’s traditional economic star, may be a more accurate bellwether for the success of China’s economic reforms.
The city’s recent history symbolizes the fate of the nation. Shanghai was a small fishing town until 1842, when Britain, under the Treaty of Nanking, which ended the Opium Wars, established a foreign concession. France entered five years later, soon to be followed by American and Japanese settlements. By 1900 Shanghai was a major trading center, though the impoverished Chinese masses remained hemmed into their own quarter.
The Communist Party was formed in Shanghai in 1921. The city was seized by the Japanese and held through the end of World War II; the Communists entered in 1949, finally extinguishing foreign control. Shanghai is where Mao Zedong launched the Cultural Revolution in 1966. It served as the last stronghold of the so‐called Gang of Four after Mao’s death, and is home base for President Jiang.
Even during the worst Communist excesses, Shanghai retained some Western influence. The buildings of the Bund, along the Huangpu waterfront, presented an incongruous 19th century European facade. Residents were wealthier, enjoyed a more abundant night life and adopted some occidental fashions. Business remained a factor in Shanghai life.
Thus, when Deng Xiaoping moved China onto its reform course in 1978, Shanghai was ready to regain its position of economic leadership. However, even a decade ago, the airport was pre‐modern, new construction was nonexistent and automobiles were rare. It was a city where prosperity remained merely a possibility.