Economic boom restoring glory of China's 'Paris of the Orient'

March 29, 1994|By Robert Benjamin | Robert Benjamin,Beijing Bureau of The Sun

SHANGHAI, China -- This giant of a city believes its time has come again.

Once called the "Paris of the Orient" -- and several scatological epithets -- Shanghai was shackled under the first four decades of Chinese communism, its prowess drained to support the rest of China.

But over the last two years, Shanghai has been unleashed, sparking a crescendo of change and an upbeat rush to the future.

Huge chunks of the city are under reconstruction, redressing years of neglect, with expressways, bridges, a subway, river tunnels, a new port, a second airport and dozens of high-rises. The work may push a million of 14 million residents out of its jam-packed core.

Pudong -- a high-stakes development zone between Shanghai and the East China Sea that initially provoked skepticism -- now is luring investment from some of the world's biggest companies. The multinational firms aim at the Yangtze River valley's largely untapped market of 300 million consumers.

Shanghai even seeks to reclaim its past glory as Asia's top financial center, ambitiously boasting that it could surpass Hong Kong in a generation if China's financial reforms continue, the city's 3-year-old stock market expands at its current rate, and foreign bankers and brokers remain hungry to get in on the action.

In the meantime, much the same boom that transformed and enriched Southern China and, before that, the rapid-growth Asian "tigers" -- Hong Kong, Taiwan, Singapore and Korea -- has now enveloped Shanghai. And a mad race is on to take maximum advantage of the extraordinarily good times.

"Everyone's coming from all over the world to Shanghai now like it's just full of money," says Chen Xingfu, a local financial consultant. Business is so bountiful that he's considering joining a new yacht club that's opened on a suburban lake. Initial fees run $10,000.

"It's like 1888 in San Francisco, the Gold Rush days: The rules are wide open, and no one's enforcing them," says Diane Long, president of Shanghai's American Chamber of Commerce. The chamber has ballooned from 280 to 543 companies in two years. Some wait a year for limited Western offices and apartments at rental rates that top Manhattan's.

"Every day brings change," says Zhang Qing, 23, prowling a flashy disco atop a Shanghai hotel owned by the Chinese army. By day, she says, she earns $57 a month as a nurse. By night, she and a seemingly endless squad of like-minded young women begin at $23 for a bit of small talk with Hong Kong and Taiwanese businessmen.

"Things are happening so fast that if you don't go down a street for three weeks, you find another building has been torn down and the whole configuration has been changed," says Mark Hu of Shanghai Johnson Ltd., which is sinking $30 million into a Pudong factory to make Pledge furniture polish and Raid bug killer for China. Foreign investment here in just the last two years more than tripled the total for the entire 1980s.

"This is the last opportunity for Shanghai to change its face and become an international city," says Xu Kuangdi, a vice mayor. Mr. Xu is pressed for time this day; another foreign investment house is paying its respects, joining the many money men eager for a renewed perch here as an antidote to the developed world's slow growth.

Shanghai's "last opportunity" was set in motion by senior Chinese leader Deng Xiaoping. The patriarch didn't risk allowing the city to participate in his economic reforms in the free-wheeling manner of Southern China in the 1980s; Shanghai was too critical to China's economy.

But even Mr. Deng now has expressed regret about that caution. His famed trip to Southern China in early 1992 -- in which he endorsed creating a "socialist market economy" -- provided Shanghai's go-ahead. "In Deng's reforms, Shanghai was his trump card," says a local journalist.

Long renowned for its savvy and lively step, Shanghai took off. Its annual growth rate the last two years has approached 15 percent, even outstripping China's yearly rate of 13 percent for the same period.

As in the rest of China under Mr. Deng's market reforms, political control remains tight here. Two of Shanghai's leading dissidents, elderly writer Wang Ruowang and young journalist Zhang Weiquo, have left for the United States. Arrests and harassment of other activists continue.

But on the economic side, Mr. Deng, who winters at a state guest house on the city's west side, wants Shanghai to move even faster. And that is apt to remain a national priority since two of his possible successors, President Jiang Zemin and Vice-Premier Zhu Rongji, are former Shanghai mayors.

New prayer

Almost everything's for sale here. Shanghai's museum has been leased to a Hong Kong company for offices. Up for grabs, particularly by foreign banks, are City Hall (the pre-1949 quarters of the Hongkong & Shanghai Bank) and dozens of other stately European structures lining the Bund, Shanghai's historic riverfront esplanade.

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