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The Economy of Shanghai


Shanghai is China's most important industrial and commercial city. It produces machines, chemicals, metals, fertilizers, petroleum products, ships, textiles and consumer goods.

Shanghai is located near the mouth of the Yangtze River on a delta that is only 10 to 20 feet above sea level. In English Shanghai means on the sea or going to the sea. Note from the map of Shanghai that it is located at the confluence of the Huang Pu River and the Suzhou River. In English huangpujiang is yellow-banked river.

The old city is on the west bank of the Huangpu River. North of the old city is the major commercial area. Nanjing Road is the major commercial street. Note the location of Shanghai Number One Department Store. Yen An Road is a major street where Shanghai's administrative offices are located. Western Shanghai is primarily residential and is bounded by Chung Shan Jie on the north and west. There are also residential areas east of the Huangpu River. A major commercial area called Pudong (Eastbank) has been built east of the Huang Pu River. The Hong Kou District is north and east of the Suzhou River and contains many factories. In English Hong Kou means mouth or entrance of the rainbow.

The Municipality of Shanghai consists of the central city and ten adjoining counties. It is directly controlled by the central government in Beijing. In 1970 the Municipality of Shanghai had about 12 million people. There is a twenty square mile central city where the density is 125,000 per square mile, a transition zone of 160 square miles where the density is about 16,000 per square mile, and an agricultural hinterland of 2000 square miles where the density is about 2000 per square mile.

Shanghai's latitude is about 32° N, which is about the same as San Diego, California and Cairo, Egypt. Is average annual temperature is 61°F with a maximum of 80° in July and a minimum of 37°F in January. The rainfall averages 45 inches per year, with the heaviest in June and the lightest in December.


Because of its location it would be natural to assume that Shanghai was always China's primary industrial and commercial center, that is not the case. Before the development of ocean-going vessels and navigation the ocean was more of a barrier than an opening to the world. The name for China in Chinese is Central Kingdom because it seemed to be bounded on all four sides. To the south there was the Himalayas and the tropical jungle. To the north was the snow and ice of the Arctic. To the west was mountains and boundless deserts. And to the east was the barrier of the ocean. During ancient times the most important and wealthy city of the Chinese Empire was Chang-an, now called Xi-an. It was the eastern terminous of the Silk Road. The feasible opening to the outside world was through the western desert rather than the eastern ocean.

Fifteen hundred years ago the settlement where Shanghai is now was a mere fishing village. About a thousand years ago during the Sung dynasty Shanghai started to develop because the area to the west of it around a lake, Taihu, emerged as a significant agricultural area. Later when the Mongols began to invade the north there was an influx of refugees to Shanghai. Coastal and inland water commerce was feasible and Shanghai was ideally situated for this traffic.

By the time of the Ming dynasty (1368-1644) Shanghai had developed textile industries based upon cotton and silk. By the early Qing (Manchu) dynasty Shanghai had twenty thousand people working at spinning cotton into yarn.

During the middle of the 19th century circumstances for Shanghai rapidly changed. After the Taiping rebellion cut Guanzhou (Canton) off from the interior of South China, Shanghai prospered more. Britain and the other European powers recognized the strategic location of Shanghai and demanded access to Shanghai. This was granted in 1842 after the defeat of the Qing Empire in the Opium Wars. In 1857 Britain secured the right to sent ships up the Changjiang (Yangtse River). Shanghai soon was the most important port of China.

In the 1890's Shanghai began to develop industry as well as commerce.

(To be continued.)

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