An Economist Goes To Shanghai

LAST OCTOBER, I found myself in an Uber being whisked along a bank of the Huang pu River. I’d just arrived in Shanghai, and several of my students were eager to take me to see the sights. They wanted to show me the Bund (rhymes with fund). That’s the local, Persian-origin name for the promenade on which the Europeans a century ago erected a collection of 50 or so banks, trading companies, and insurance firms: the very heart of pre-Communist capitalism in China. The buildings, especially nice when illuminated at night, are done in 1920s Beaux-Arts or art deco style.

- Deirdre Nansen McCloskey

But what gobsmacked me when we got out of the car wasn’t the warmed-over continental architecture I’d been brought to admire. On the opposite side of the river rose the Pudong district. Thirty years ago Pudong was farmland, wretchedly farmed because it was collectivized. Then local Communist Party officials decided to plat it and put in water, sewerage, and a few roads—part of an experiment in opening up the economy that continues to this day. Officials were tempted to erect their own, state-financed version of the Bund in the new turf, but a professor from Hong Kong convinced them instead to offer 99-year leases and then let developers build whatever they wanted, with private finance and profit taking, doubtless with a little baksheesh on the side.

The result has been scores of immense modern skyscrapers, dwarfing the proud European buildings of the Bund. They now stretch for miles in that direction, typically 80 stories high, festooned along the river with garish advertisements and corporate logos, like the loveliness of Times Square or Piccadilly, though gigantically bigger. As I gawked, I realized that in Shanghai I was the rube (a term I later had to explain to my hosts). One colleague at Fudan University told me that when he arrived as a freshman in 1981, there were two modern skyscrapers in the city. Now there are 2,000.

Shanghai, about two-thirds of the way up the east coast, has been since the 1800s the most open place in China. It was forced open by Western governments establishing “concessions” where Europeans lived and traded in silk and opium and electric lights, out of reach of Chinese law. Aside from the so-called French Concession, which looks like a piece of Paris, Pudong and the rest of Shanghai are not beautiful, though the architectural standard is high. But taken as a whole it is immensely impressive and filled with meaning.