METROPOLITIAN SHANGHAI:THE EARLY YEARS

Shanghai's rapidly strengthening economy was fueled by its strategic location along the Yangtze River Delta, making the city easily accessible by western traders. Shanghai underwent temporary occupation at the hands of British forces during the first Opium War at the beginning of the 19th Century. British occupation came to an end with the signing of the Nanjing Treaty in 1842, which resulted in the opening of ports to international trade. Interaction with foreign nations on the basis of trade rapidly increased under the Treaty of Bogue in 1843 and the Sino-American Treaty in 1844, which led to the establishment of foreign concessions throughout China.

The Municipal Council of Shanghai met in 1854 to organize the areas quickly developing foreign settlements. It was during this period that the British settlement situated just south of Suzhou Creek in Huangpu and the American settlement located just north of the creek in Hongkou unified to form the International Settlement. The French, who chose to operate independent from the Municipal Council, established the French Concession, an area that continues to thrive today. A diverse population who became known as "Shanghailanders" flocked to Shanghai during this prosperous period to take part in the extensive international trade industry, expanding the city's population of foreign citizens to more than 70,000. By 1932 Shanghai had grown to be the world's fifth largest city.

As the Sino-Japanese War came to a close Japan also emerged as an established foreign power amidst Shanghai's diverse economic landscape. The city's first factories were built by Japanese corporations, in effect launching Shanghai's industrial sector. Other foreign powers quickly followed the Japanese model, establishing factories in Shanghai, earning the city recognition as the most important financial center in the East.

It was not until 1927 under the Republic of China that Shanghai was recognized as a municipality. While areas within the city designated as foreign concessions were excluded from municipal power, the area still encompassed approximately 830 square kilometers. Under the administration of a Chinese mayor and municipal council the city established a new center removed from the foreign concessions within Yangpu District.

Shanghai fell under attack by the Japanese Naval Air Force on January 28, 1932 in response to Chinese student protests to Japanese occupation of China's northeast provinces and the Manchurian Incident that had recently erupted. Chinese retaliation resulted in fighting that ended in a ceasefire in May of the same year. Shanghai saw conflict again in 1937 during the Battle of Shanghai, which resulted in the Japanese occupation of all Chinese administered districts of the city. This excluded the foreign concessions including the International Settlement and French Concession. It was not until 1941 that the Japanese gained control of the International Settlement, occupying the area until 1945. 

The modern history of Shanghai underwent a significant shift following the Communist Party's victory in 1949. The Peoples Liberation Army gained control of the city, which at the time was one of the three remaining municipalities that had not been merged with neighboring provinces along with Beijing and Tianjin. Drastic changes were applied to the city's existing sub-divisional boundaries, which resulted in the exodus of many foreign firms to Hong Kong in response to China's shift in political policy.

Although the Cultural Revolution often resulted in trying conditions for China's economic centers, Shanghai managed to operate at its elevated level of production as well as maintain a great deal of its social stability. The city evolved during this period as a hub for revolutionary leftism as it continued to grow as an industrial power within China. Throughout the history of the Peoples Republic of China Shanghai has been the central government's leading tax contributor, but not without great sacrifice on behalf of the city's infrastructure and capital development. Many of the city's economic freedoms were reined in to insure the fiscal well being of the nation and restrain vulnerability due to foreign investment. It was not until 1991 that Shanghai was able to reform its economic policies. The dramatic results of these economic reforms are evident in the monumental development of Shanghai's industrial areas especially Pudong, in the past two decades.