Profile of the Shanghai Economy

This chapter aims to provide a context for the overall discussion, in the form of an overview of the process of development experienced by Shanghai’s economy until 1949, while drawing on macro statistics to illustrate the structural changes Shanghai's economy underwent in the second half of the twentieth century. The development of Shanghai’s economy through the Republican period was driven by various domestic and foreign private economic entities responding to China’s expanding foreign trade after the opening of the ports. By contrast, after 1949, with the establishment of the Chinese Communist Party regime and the introduction of the socialist system, such private economic activities came under government control. The rapid development of Shanghai’s heavy industry under the socialist system and the impact of the “Heavy-industry-priority Strategy” in the planned economy period changed the structure of Shanghai’s industry, which had previously been centered on light industry in the Republican period. Furthermore, the significant decline in Shanghai’s role as a foreign trade port triggered by the Korean War in the early 1950s meant that the conditions that had characterized Shanghai’s economy up until the Republican period substantially transformed.