Shanghai's first few opium-fueled booms made the city a by-word for opportunity, excess, style and more than a hint of sleaze. Jump forward a century and, after a long period of enforced post-revolution isolation, Shanghai is well and truly back in business.
The foreigners and multinationals are back in town and the engine of China's economic growth is gaining ground fast on its East Asian neighbors, including Hong Kong and Tokyo. Once known as the Paris of the East, the French connection is becoming harder to spot under a tide of steel and glass. Now this city of 17 million is out to claim a new label – that of Asia's commercial capital.
Today, Shanghai is home to more than 300,000 foreign workers, making it by far China's most international city. By the end of last year, 56 multinational companies had chosen to base their regional headquarters in Shanghai while close to half the world's Fortune 500 companies had opened offices in the city.
In September, Shanghai will host China's first Formula One race, billed as the largest sports event China has ever hosted. In 2010, it will be the first city in the developing world to stage a World Expo.
With so much international interest, the city has become the prime Mainland entry point for billions of dollars of foreign investment into China. With just over one percent of China's population, Shanghai accounts for around five percent of the country's GDP.
Meanwhile its port, one of the busiest in the world, exports more than a quarter of China's output with work underway to triple its capacity.
One of the best indicators of Shanghai's prospects is the optimism shown in the future of the city, already one of the top destinations for foreign direct investment (FDI). Last year contracted FDI in Shanghai rose by 23.5% to US$11.06 billion. It's a figure that looks set to continue rising – along with the city's skyline.
Take the view from the seductively stylish Cloud 9 Bar, perched atop the 88-storey Jin Mao Building. It's the third-tallest building in the world and a prime vantage point from which to gaze down on the Bund, the Chicago-style commercial center of the last century, and Pudong, the gleaming, fast expanding new business city of the 21st century.
In Shanghai, change is the only constant. Swathes of the old city are being bulldozed to make way for new office, residential and retail complexes. High-rise cranes dot the horizon and the clatter of jackhammers does battle with the honk of taxi horns as the defining sound of the city.
All this construction is a necessity to keep pace with one of the fastest growing urban economies in the world. In the first quarter of 2004 the city's GDP grew by 13.5%, the fastest quarterly growth in six years and well ahead of the national average.
"There is a constant need to improve the city's infrastructure," said Brendan Jennings, Chairman of the British Chamber of Commerce in Shanghai. "There's a need to have better roads and a need to have better links with the outside world. But that's the good thing about China, if they have a problem, and if they decide to do something about it, they have a forceful government that can make things happen."
One such project is the 33km Hangzhou Bay Trans-Oceanic Bridge, a US$1.4 billion project linking Shanghai to the port city of Ningbo to the south. Opening in five years, the bridge will almost halve the journey between the two cities and tie Shanghai in with its thriving Yangtze Delta hinterland.
It's the kind of monumental project that would stupefy most outsiders, but which barely raises an eyebrow in Shanghai – the bridge is just one of a number of billion-dollar mega-projects underway.
But while Shanghai's fortunes and its buildings may be soaring, the city physically is sinking. Studies have found that a boom in construction is causing the city to sink at between one and two centimeters a year, leading authorities to rush to introduce new legislation on planning permits and regulations on the extraction of groundwater.
A more pressing business worry is the power shortages that last year hit industrial production on at least five occasions. More than 2,000 firms, including auto giants Shanghai GM and Shanghai Volkswagen (one of China's most successful foreign JVs) were asked to halt work to cope with excess power demands caused by the sweltering summer heat. The government has promised action, but it will be some time before new power sources come fully online.
So far, that has done little to dampen the pace of growth with Shanghai still a land of opportunity for millions of people. As government restrictions on the mobility of labor have eased, Shanghai has attracted a growing pool of talent from across China, drawn to work in the city's fast-growing auto, chemical, IT and financial service sectors. As a result, the gap with Hong Kong and other regional centers in quality of labor is shrinking fast, said BritCham's Jennings.
Meanwhile, with their city booming and wallets expanding, Shanghainese are becoming bigger spenders. In recent years, retail sales have risen by an annual average of 15.5%, with spending on luxury goods rising even faster.
Carmaker Rolls-Royce recently opened a showroom in the city, selling six cars in its first four months at more than US$700,000 each – with local businessmen from the rapidly expanding real estate sector being the main buyers. Another showroom for Ferrari and Maserati is set to open soon on Nanjing Lu, Shanghai's neon-draped version of Fifth Avenue.
"There's a sense here that anything's possible," said Marcus Ford, manager of the M On The Bund, widely regarded as one of Shanghai's best restaurants and at five years old already a city institution. Ford's customers, the high rollers of the new Shanghai, are "fantastically optimistic," he said. "This is a get-it-done kind of place."
It's the sort of comment you used to hear made about Hong Kong in the high-flying, big-spending 1980s. Indeed, the supposed contest between the two cities to be the much-coveted gateway to China has long been a subject of debate, but says BritCham's Brendan Jennings it's one that misses the point.
It's not a question of when or whether this city will overtake Hong Kong, he said. "The whole China market is becoming so much bigger that it will soon need lots of Hong Kongs – and without a doubt Shanghai will be one of them."