Background
For over 150 years Shanghai has been the most important of China’s trading cities. After the end of the first Opium War in 1842, the defeated Chinese Empire had to agree to the opening of five Treaty Ports: Shanghai, Canton (now called Guangzhou), Ningbo, Fuzhou and Amoy.
These cities were developed with foreign investment, and included substantial expatriate settlements ruled by foreign countries. The most powerful settlements were those of France and Britain. They became cosmopolitan colonies where business interests from across the world met. The greatest and most cosmopolitan of them all was Shanghai, the ‘Paris of the East’. Its centre was extravagantly rebuilt in European style, with all the trappings of smart society – clubs, hotels, restaurants, racecourses and theatres – from which the Chinese people themselves were largely excluded. Between the rich Europeans and the indigenous Chinese there were formidable physical, racial and cultural barriers.
When the communist government came to power in 1949, foreign nationals were expelled from the city, and a new era of hard-line Stalinist planning began. The country’s new leaders resented the glamour of the city’s past, and mistrusted the citizens of Shanghai who had been associated with it; and they kept a tight rein on Shanghai’s development. None the less, the city’s strength as a great manufacturing centre continued: for many years from the 1950s to the 1980s its industrial output and productivity were greater than any other Chinese city. Although its population of 7 million people represented only a hundredth of China’s total, the city accounted for a quarter of the country’s export earnings and a sixth of the total revenue of the state. But the city was starved of investment. Its roads, factories and housing were dated and congested, its industries were old-fashioned, and it was beginning to lose out in foreign trade to other emerging Asian cities.
In 1990 the central government in Beijing relaxed its stranglehold on the city, which was encouraged at last to make the most of its commercial contacts with foreign economies. Since then money has been poured into the regeneration and redevelopment of many parts of Shanghai. It was recognised that China needed the strong link with foreign markets that an international economic city would provide. 
Shanghai’s position at the midpoint of the fastest-growing area of the world economy ensured that it would be chosen to spearhead China’s economic growth. The 4000km-long Asian Economic Corridor stretches from Singapore in the south to Tokyo in the north, and includes such major cities as Seoul, Taipei, Hong Kong, Bangkok and Kuala Lumpur, the centres of the ‘Asian Tiger’ economies. All of these cities are within two hours’ journey from Shanghai.
On 18 April 1990, the Chinese government approved the opening up and development of Pudong, previously a marginal area across the Huangpo river from Shanghai. Before 1990 it had been an industrial wasteland on swampy ground, with little to attract the people of Shanghai or foreign investors. The 1990 decree created the Pudong New Area, 520 square kilometres into which vast sums of money would be poured in an effort to make it the new economic powerhouse of China. New bridges and rail links were built over and underneath the Huangpo; financial and communication links with foreign investors were strengthened; smart new housing was constructed to tempt new settlers; and massive office and light industrial complexes sprang up. A new underground terminal and a new airport are planned. From being a remote and unhealthy backwater, Pudong became the smartest and most desirable place to live in the city.
Overlooked by the Oriental Pearl Television Tower, Pudong is rapidly expanding. Development is focused on service industries, finance and international trade: the four main zones are the Lujiazui Finance and Trade Zone, the Jingqiao Export Processing Zone, the Waigaoqiao Free Trade Zone and the Changjiang High-Tech Zone. There is also a designated Tourism Development Zone to attract visitors from overseas. Already a large proportion of foreign investment enterprises in China are in Pudong.
