Shanghai: World City?

Part III of a three-part series on Expo and the future of Shanghai

September 9 2010 by Robert Lawrence Kuhn


Shanghai’s ambition? World city! Can Shanghai break into the big leagues of New York and London?

For more than a millennium, China’s economy was the largest on earth, and China’s science was centuries ahead of Europe’s. But then came 150 years of foreign oppression and domestic strife, with all manner of devastation and misery. Now, as China ascends again to the status of a great power, Shanghai, China’s largest and most advanced city, seeks to become a world city.

I wrote the biography of China’s former president, Jiang Zemin, who was mayor and Communist Party secretary (top leader) of Shanghai during the middle and late 1980s, and who, under Deng Xiaoping, promoted Shanghai’s rapid development in the 1990s. (Jiang Zemin became general secretary of the party in 1989, after the Tiananmen Square protests and massacre.) My book, How China’s Leaders Think, looked to the future of China. Now I look to the future of Shanghai.

I’m in Shanghai for World Expo, watching all nations ratify China’s emergence and assessing Shanghai’s increasing prominence. Here’s my hunch: To see Shanghai today is to visualize China tomorrow.

Shanghai’s epic story is a unique amalgam of East and West, a historic combination of cultures and traditions. Ironically, it was through distasteful historical circumstances that Shanghai came to engage and embrace the West.

Beginning with the First Opium War in 1839, foreign armies, particularly the British, attacked a self-isolated, self-weakened China, bringing the once-proud Chinese empire to its knees. The invaders forced degrading “Concessions,” sections of cities sliced off and ceded to foreigners. Shanghai was carved into French, British and American Concessions (the latter two combined into the International Concession). The Chinese became second- class citizens in their own country. It was humiliating.

Still, the foreigners built schools, hospitals, electrical plants and waterworks, installed sewers and paved roads, engineered concrete and iron bridges, and introduced trams, busses, and automobiles. Shanghai became the most modern city in China.

In the 1920s and 30s, Shanghai was the “Pearl of the Orient” or the “Paris of the East.” Ballroom dancing in elegant hotels epitomized the era. The famous Bund, with its European-style architecture along the Huangpu (Yellow) River, was the center of city life for foreigners and upper-class Chinese. All the while, the poorest, living in shantytowns on the margins of the city, barely able to feed their children, became the mass base for the Communist revolution in the 1940s.

But with modernity came decadence and debauchery. Shanghai became a center for smuggling opium. Mafia-like gangs controlled the rackets: prostitution and gambling as well as opium. Any who crossed them suffered extreme violence.

In 1937, as part of Japan’s vicious determination to conquer China, the Japanese army invaded and captured Shanghai. Although not suffering the systematic rapes and slaughter that people in other cities did (notably in Nanjing, not far away), Shanghai’s people endured bitter times. After the Western allies and Chinese army defeated Japan, the Communists won a debilitating civil war, taking the mainland in 1949. The Chinese people and were filled with hope. But less than a decade later, ideological extremism visited misery on millions, first with mass political campaigns (denunciations), then mass famine (“Great Leap Forward”), and finally, China’s decade-long descent into chaotic madness (“The Cultural Revolution,” 1966-1976).

Today, Shanghai’s GDP is eight times that of 20 years ago. Across the Huangpu River from old Shanghai, Pudong is a developmental miracle. Catalyzed by reform, begun in 1978 by Deng Xiaoping (two years after the death of Mao Zedong), the rebuilt Pudong has become a world center of finance and trade, a massive economic bridge linking China with all nations where some of the most modern skyscrapers in the world dwarf older, smaller buildings.

As one leader tells me, “When constructing Pudong, we learned from the world’s developed cities, but rather than mere copying, we adopted their strong points and improved their weak points. Pudong looks like Manhattan, but is superior in layout—less congested and sunshine reaches city streets.”

Shanghai’s goal is not modest: China’s largest metropolis will become a leading center in four vital areas of international importance: finance, trade, shipping and general economics. One morning I visited one of Shanghai’s massive container ports. Containers—the blood cells of the arteries of global trade, transporting the products that feed the economic body of humanity—filled the horizon. Shanghai is already the world’s second- largest port (after Singapore)— by some measures the largest—and it is growing still. It’s overwhelming and, to some, perhaps a little frightening.

China knows that logistical efficiency, in trade and shipping, generates commercial strength. Finance, run by Shanghai Vice-Mayor Tu Guangshao, is key. He says that for Shanghai to become an international center of finance, trade, shipping and general economics requires coordination, each element reinforcing the others. He notes that the global financial crisis gives Shanghai a chance to step up, but stresses that Shanghai will have to “listen to the market.” Market innovaton, he says, is the key to Shanghai’s future as a financial center. Certainly, I say, this must include full convertibility of the Chinese currency, the yuan renminbi (RMB).

It is China’s national strategy that Shanghai become a world leader in finance, trade, shipping, and general economics. China and Shanghai need each other. China needs Shanghai’s leadership. Shanghai needs China’s huge manufacturing base and growing consumer markets—a continent- size economy of 1.4 billion people. Shanghai officials believe that by mid-century, and probably before, Shanghai will be a world center of finance, in the class of New York and London. Some say privately that the only real hurdle is national political reform, political change, which most believe will surely come.

Shanghai Party Secretary Yu Zhengsheng is both visionary and realist. “A modern service sector requires a rational legal environment, tax revenue environment, and supervision environment,” he says. “This is not a problem that can be solved simply by attracting foreign investment. It requires systematic innovation. It is not an easy job…. Expo should help people to reach a consensus on China’s future development, on our way of thinking, and on how Shanghai should develop.”

A wise Chinese friend, with an American PhD in science, notes that while Shanghai has a fascinating history, its future holds far more significance than its past. He encourages me to focus on Shanghai’s science: “It’s becoming world class,” he says.

A culture rooted in science is a prime goal of China’s leaders. President Hu Jintao, himself trained in science, has made science and technology—and the creativity and innovation needed to energize it—a cornerstone of his vision to build a modern harmonious society. A new national policy supports world-class talent. Top Chinese scientists, educated and working abroad, are now returning home to a China that has the resources to back them with firstclass equipment and talented students.

China is targeting a dozen or more areas of science where it intends to be among the world leaders. To investigate, I select stem cell research, which underlies regenerative medicine, expected to be a foundation of 21st century healthcare. (China has no religion-based debate over embryonic stem cell use.) At Shanghai’s Institute for Biochemistry and Cell Biology, Executive Director Jing Naihe tells me that “our top stem cell labs are now 80-85 percent of the world’s best.” Five years ago, he says, “we were at 50-60 percent” and in “10 to 20 years we should be top level.”

Design characterizes Shanghai, from urban planning to fine art. Indeed, Shanghai has become a center of contemporary art. How extraordinary for a city and a society that only a few decades ago shunned modernity and coerced homogeneity! Before reform, China was a drab, monolithic country. Everyone ate the same kinds of food and wore the same styles of clothes. “Art” was dictated by the state: It was coercive, superficial, mediocre, and boring.

Not so today. With reform, Shanghai exploded with vitality and creativity. Here one can see audacious avant-garde art. In a Shanghai galley, housed in a former steel factory, I marvel at the original and shocking visions—from the elegant to the bizarre, the soothing to the sexual.

When future historians write the book of Shanghai’s epic story, a middle chapter will be about Expo 2010. Expo’s about the future. Shanghai is about the future. Expo is expanding how people think. The world’s creativity has come to Shanghai.

No city is quite like Shanghai. Energetic. Adventuresome. Dynamic. Distinct. It is said that Shanghaiborn basketball player Yao Ming symbolizes Shanghai’s height; Shanghai’s subway, Shanghai’s depth; and Shanghai’s Maglev train, Shanghai’s speed. And if the Huangpu River represents Shanghai’s past and present, the vastness of the oceans represents Shanghai’s future. The Shanghai spirit is expressed by the saying, “The sea is big because it has 1,000 rivers running into it”—this represents openness, diversity, fusion, and creativity.

The past is but prelude. Shanghai’s new epic story is to become a world city—a leader in business, finance, trade, science, technology, and perhaps even in culture. Before mid-century, China is forecast to surpass the U.S. as the world’s largest economy (though not in per capita income). As China reaches out beyond its borders and across the seas, reclaiming its role as a leading nation, Shanghai is forging the future, leading China today, and perhaps the world tomorrow.

But just as there is concern outside China about China’s “true intentions,” there is debate inside China about China’s “rightful role.” But China and the world must be working partners—tackling the grand, global issues of our planet, yet not ignoring the knotty, thorny, fractious problems of our people.

As for alternatives, there are none. Here, then, is Shanghai’s historic mission as a world city—as the largest population on earth continues the greatest transformation in history.