The Story of Shanghai, China's Largest City

ruticker 02.03.2025 23:23:37

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Of all the cities on Earth, the pace of civilizational transformation is most evident here. With over **25,000 buildings** standing **12 stories or more**, it has more high-rises than anywhere else and is the most important economic engine in China. But there are real challenges on the horizon for the city of **25 million**, some that took a pandemic to fully emerge and others that grow more frightening with each passing year. This is **Shanghai**, a bellwether of the 21st century. The most populous city in the People's Republic of China rises on the low-lying swamplands where the tributaries and lakes of the **Yangtze River Delta** meet the **East China Sea** and the vast **Pacific Ocean** beyond. Founded in the **10th century**, its easy access to the extensive Asian interior made it an ideal location for those seeking to trade regionally and eventually with the empires of the West in the **1800s**. After a prolonged struggle with imperialists who used subterfuge and sabotage, like hooking millions on opium, China was forced to allow foreigners greater access to its markets and control over much of Shanghai. The city became a foothold for the British, French, Americans, and Japanese, who took possession of designated areas called **concessions**, where they established businesses that extracted great resources and wealth. For many Chinese, this was the **century of humiliation**. Shanghai was essentially split into a Chinese half and a more modern European-styled western half, home to around **35,000 foreigners**. Despite this dysfunction, the combined area thrived. By the mid-1930s, it was one of the largest cities in the world with **3 million inhabitants**. Then it was torn apart. Shanghai is where the **Second World War** truly began, as Japan unleashed blitzkrieg. The combination of siege warfare and aerial bombardment, followed by sniper attacks and house-to-house fighting, produced the horrific scenes now associated with Europe but were first reported in China’s mega city. Despite this nightmare, a glimmer of humanity still flickered in Shanghai, as evidenced by its unconditional welcoming of any Jews fleeing the Holocaust—one of the only cities in the world to stay open to them for most of the conflict. The war's aftermath brought the communists to power, forcing many foreign businesses to move south to independent **Hong Kong**. Despite this drain on capital and talent, the economic heart of the People's Republic of China remained in Shanghai. For the next four decades, this vital port city provided **70%** of all the tax revenue that was collected and spent nationwide by China’s central party, whose bureaucrats were ensconced in **Beijing**, **1,100 kilometers** away. This was an untenable burden on the Shanghainese, and in **1991**, two of their local leaders seized a rare opportunity to change things. After the bloody crackdown on student protesters in **Tiananmen Square** in **1989**, China’s paramount leader **Deng Xiaoping** wanted new management in Beijing. The reins of power were turned over to two former mayors of Shanghai: **Zhang Zemin**, who succeeded Xiaoping as paramount leader, and **Zhu Rongji**, who became vice premier. They declared that Shanghai would be the **dragon’s head** of China’s modernization, its point of contact for the rest of the world. Taxes on the Shanghainese were slashed, and foreign and domestic investment was encouraged. The results were wildly successful, with the city leading China to continuous economic growth of between **7% and 15%** annually for more than two decades. Virtually overnight, Shanghai became a boom town, with a million construction workers using **20%** of the world’s supply of cranes to build day and night. Between **2011 and 2013**, the velocity and scale of urbanization across all of China meant that it consumed more cement in three years than the United States did in the **100 years** between **1900 and 2000**. This transformation has been most obvious in **Pudong**. What used to be a dense, lively maze of lanes and alleyways is now the gleaming symbol of modern China. To get it done, the Communist Party forced everyone living there to permanently relocate to new suburban high-rises outside of the city center, then completely flattened the existing infrastructure. Tonight, like every night, thousands will gather on the **Bund** and gaze across the river at the futuristic, sterile financial district—a seductive display of China’s power but also of the CCP’s willingness to destroy what it doesn’t want to exist. A lucky few live and work high in these towers, but people all across Shanghai seem to be better off too in many respects. Consider this: a baby born in Shanghai today can expect to live to be **83**—that’s **10 years** older than a baby born today in China’s rural western provinces. This urban-rural gap can be traced to better healthcare in Shanghai and to working conditions there, which have improved dramatically. While the majority of city dwellers are still monotonously manufacturing a wide range of products, their factories are now safer than they were in the past. Life in urban centers now offers a more promising path for the average Chinese family than life in agricultural areas. The dominance of Chinese manufacturing, led by Shanghai, has allowed it to feed the West’s insatiable appetite for buying stuff—consumption that was amped up in the **2000s** by the proliferation of big box stores in America and then supercharged by **Amazon**. Shanghai’s legions of workers are employed by entrepreneurs that draw on a broad technological and scientific research community. The region’s chemical industries are fully integrated to maximize efficient use of raw materials. Its communication, both within and between sectors, is excellent, and its machine and machine tool industry is world-class. And then, of course, there is its strength in shipping. The **Port of Shanghai** is by far the largest in the world; **10%** of all container storage capacity on Earth is located here along the banks of the Yangtze River Delta. The number of large ships in these waterways explains the high likelihood that at least some of the objects currently surrounding you are stamped with the words **“Made in China.”** But fast-paced development and economic growth have also significantly increased pressure on workers in modern Shanghai. Urban life is not for everyone, and I mean that literally. In China, every person is assigned a status or **hukou** based on where they are born. One either has rural or urban hukou, and each unlocks different benefits and public services within a province. This creates various social inequalities and rigidity of movement within China. For example, Shanghai provides its young residents with urban hukou, a high-quality public education. In **2012**, **15-year-old students** there ranked first in the world in math, reading, and science in a study done by the **OECD**. Unfortunately, there are **350 million migrants** with rural hukou who have moved to work in cities across China, including a third of the residents of Shanghai. They have no access to free public education in their new cities and often face a gut-wrenching choice: either leave their children behind in their home village to attend a much poorer school or bring them along and risk not being able to afford a private education. It’s a dilemma that helps to explain why **70%** of China’s population has never attended a day of high school—the worst rate of any middle-income country in the world. Of course, Beijing is fully aware of this complicated problem. In the past, it has declared its intention to end hukou, only to abandon the goal when it became clear how hard it would be. The Communist Party has allowed some provinces in smaller cities to experiment with reforming hukou, but they’ve mostly just tinkered around the edges of the policy without implementing meaningful reforms. There is one major benefit of hukou: the degree of control it gives the Communist Party over the size of its cities. In a country with **1.4 billion** people—four times as large as the U.S.—strictly limiting the most coveted public benefits essentially imposes a soft cap on how large its most important cities can grow, helping to make Shanghai feel more like **New York** than **New Delhi**. Another challenge for the Communist Party has been **COVID-19**. Many Shanghainese were on board with China’s zero-COVID policy of total lockdown and mandatory quarantines of the infected in warehouse-like buildings until it was abruptly applied to them this spring. Two years into the pandemic, the people of Shanghai awoke to the reality that they are no different from the rest of China. The authoritarian regime will absolutely use heavy-handed tactics, even in its most important mega city, to force compliance with its policies, no matter how oppressive. It’s unclear how badly this has hurt the Communist Party’s reputation, but its extreme and flexible response to the virus, its refusal to be open with the world about how the outbreak first started, and its concealment of total case numbers and deaths are all raising serious doubts about the competence of the leadership in Beijing. To make matters worse, an even more serious problem faces Shanghai in the long term—one that threatens its very existence. As this map shows, Shanghai is the most vulnerable city in the world to **sea level rise**. The lower end of **three meters** would put virtually the entire area underwater, with many neighborhoods becoming inundated even sooner. The megacity’s greatest benefit—its position along the shores of the low-lying Yangtze River estuary—will become a liability on a scale few other cities in history have seen, as its infrastructure sinks into the soft sandy soil and seawater penetrates its groundwater supply, making it undrinkable. The region already faces widespread flooding from increasingly extreme rainfall events that will only worsen over time. Over the past few decades, the government has built hundreds of kilometers of storm walls and drainage systems to protect Shanghai from the most extreme storms and floods, but the magnitude of disaster Shanghai faces due to climate change will make most existing defenses obsolete. If a functioning city is to remain where it currently stands, many buildings and infrastructure will need to be completely reimagined in ways that we’ve never seen before anywhere, or the government needs to begin planning and implementing a gradual retreat from the river delta. Either way, the cost will be exorbitant. Luckily, Shanghai is not the only city facing the effects of sea level rise, and there are now huge incentives to develop solutions to mitigate this global crisis. Shanghai has already put some of them into practice, like its **sponge city park** that helps with flood control and water treatment, and its use of trees for cooling and water absorption. Nearly a quarter of Shanghai is now covered in trees, and the city aims to get to **50%** by **2050**. The perils Shanghai must overcome to maintain its place as a leading city are daunting, but it still has many advantages. The rest of China and the world continue to marvel at its unprecedented achievements and are eager to see its people thrive for decades to come. If you missed it, I profiled **Delhi** last time and will look at **Los Angeles** next. To dig much deeper into each city in this series, become a member at **tdc.video** linked below for my research links to the talks, books, and articles that inform each of these reports.

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