New
Shanghai
by
Pamela Yatsko
The rocky rebirth of China’s legendary city
298 pp Wiley Paperback £14.50
0471 479152
Shanghai,
perched on the southern coast of China, is known as one
of the world’s largest cities. But until recently,
it was also known as one of the sleepiest, a far cry from
the laissez-faire energy of its colonial past. Then, in
the early 1990’s, the Chinese government decided that
Shanghai would be developed into a world-class financial
and commercial centre, a city capable of leading China into
the new millennium. The recipe seemed simple enough. Take
plenty of money and 20 million people, and mix until skyscrapers
form. Add generous amounts of hyperbole, a lot of mobile
phones and a stock market. And – there you have it.
In
certain respects, Shanghai looks like a financial centre.
There are certainly plenty of skyscrapers; at one time the
city contained one-fifth of the world’s construction
cranes. The planners looked at Hong Kong, London and New
York, and concluded that glass towers were the defining
trait of a successful market economy. They simply failed
to understand the difference between the outward symbols
of capitalism and the social underpinnings of it. In essence,
this is the difference between hardware and software. The
government focused on new buildings and new roads, even
while the software of prosperity – a reliable legal
regime, openness to new ideas, freedom to innovate –
languished. A key problem was that, during the Communist
era in Shanghai, any trace of capitalist ability had been
obliterated. If anything, the city administrators retained
a traditional Maoist leaning well into the 1990’s,
with a strong emphasis on government control. They made
the mistake of believing that innovation could be planned.
The result was mainly confusion. At the factory level, most
managers interpreted the new direction as permission for
them personally to make as much money as possible, causing
an epidemic of corruption that shows no sign of abating.
In
some ways, too, the city’s vast size is also a problem.
One can make a great deal of money without having to look
beyond the city borders. The executives of foreign companies
who poured into the city ten years ago have also become
deeply dissatisfied, and now tend to focus on the local
market. Those who are looking for a national base have moved
to Beijing.
But
Shanghai’s substantial industrial base and strategic
position as a gateway to the interior of southern China
make it a logical centre for manufacturing and trade. It
may one day even become the regional financial centre it
is supposed to be.
From
the Times Literary Supplement
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