Shanghai’s Past, Hong Kong’s Future

What does it mean for a city to be free? What happens when a free city loses its freedom? And when does that occur?

Sometimes, when a city changes, residents are suddenly forced to ask themselves hard questions: Should we stay, or cut our losses and leave to start afresh somewhere else? Will this place still be enough like the community we love in a year or a decade to make it worth sticking it out? If we don’t leave now and things get worse, will we still be able to get out? Even if we’re okay now, what about our children? And all these personal questions boil down to bigger ones: What does it mean for a city to be free? What happens when a free city loses its freedom? And when does that occur?

Seventy-one years ago today, these questions were being asked by many residents of the most cosmopolitan city on the China coast: Shanghai. Some had considered leaving in 1937, when the Japanese took over all Chinese-run parts of Shanghai, and again in 1941, when the city’s two enclaves of foreign privilege, the International Settlement and the French Concession, fell to Japan. But they had stayed, only to face a choice early in 1949, when the Red Army advanced toward the great metropolis of the Yangtze Delta. While many locals welcomed the Communist Party’s arrival, others, Chinese and non-Chinese alike, feared that their way of life would be dramatically changed once Mao Zedong’s forces took over, and changed for the worse. As the first battles outside the city began on May 12, 1949, those who had remained surely wondered if they’d made a mistake.

Seven decades later, the same questions are being asked again, but in Hong Kong. In the Pearl River Delta’s most cosmopolitan city, the people asking the questions today might have pondered leaving in 1984, when Beijing and London made the deal that would change a British colony into a part of the People’s Republic of China (PRC). They also might have considered leaving at other, later points, including before July 1, 1997, the day of the Handover. Today—as the mainland government warns that it is losing patience with locals seeking to defend the liberties and legal protections that make their city markedly different from all mainland ones, protesters battle with police after nearly a year of struggle, and the novel coronavirus disrupts daily life and the economic activities that make the city’s unique lifestyle possible—Hong Kong residents may be wondering again if they’ve made a mistake.

Hong Kong and Shanghai are connected by more than just history: they have long competed for the crown of the China coast’s most worldly, wealthy, and cosmopolitan city (even during eras when racism and segregation limited the freedoms of many of their residents). And each one’s successes have been matched by the other’s downturns. For a time, Shanghai was an open and prosperous city far outstripping its sleepy colonial counterpart—before 1949. But as Shanghai suffered under Maoist rule, Hong Kong prospered. Both have triumphed when they remained open to outside finance and outside cultures; both have turned stagnant when denied access to the world.

Therefore, the story of Hong Kong and Shanghai isn’t simply a defining story of the last two centuries of Chinese history. It is really the story of all world cities around the globe today: how they thrive and how they decline.


Twin Cities

The histories of Shanghai and Hong Kong have long been entangled, sometimes running on parallel tracks, sometimes diverging sharply. Since the Opium War (1839–1842), colonialism and commerce have linked the cities (each of which is the focus of a book that each of us has just finished writing).

After that conflict, the triumphant Britons forced the Qing Dynasty (1644–1912) to open Shanghai to European trade, creating a foreign-run enclave that developed into the “International Settlement” at the city’s center, and also to transform Hong Kong into a British colony. For decades—a period lasting until 1949, which Chinese leaders and mainland textbooks call a “century of humiliation”—the two cities, twinned by empire, vied with each other for primacy.

The story of the region’s leading bank illustrates the tight interconnection between these two cities. The first two initials of HSBC stand for the pair of ports, which make its full title the Hongkong and Shanghai Banking Corporation (the official British spelling for its colony was as a single word). Throughout most of the “century of humiliation,” the bank’s official headquarters was in Hong Kong; indeed, HSBC continues to issue the city’s bank notes. Even so, the most important branch was on the Bund in Shanghai, in a spectacular building that in the early 1900s was as grand as any structure in any city on the Pacific.

Aerial view of the Bund, Shanghai (ca. 1927). Image courtesy of Adrienne Livesey, Elaine Ryder, Irene Brien, and Historical Photographs of China, University of Bristol (

From the late 1800s through the 1940s, the cities had much in common. Both were communities of migrants, full of people from across China and around the world. The International Settlement—symbolized by the riverfront Bund of Western-style skyscrapers and office buildings and the economic heart of Shanghai—was, like all of Hong Kong, dominated by British interests. In that international enclave, as in the colony to the south, racist legal structures guaranteed white privilege.


Shanghai’s Rise

There were, though, important differences. Shanghai’s greater economic might gave the Yangtze Delta port a stronger claim to world-city status than its partner and rival on the Pearl River had. It mattered that Hong Kong was a colony, run by an empire, while Shanghai was a free port, managed by multinational professionals. Shanghai attracted and directed greater flows of capital than did its rival to the south.

There were cultural and political distinctions, too. Shanghailanders (as white residents of that city were called) fancied their home far more cosmopolitan than a colony could be. Viewing themselves as both citizens of the world and citizens of Shanghai, they looked down on Hongkongers as provincial and stodgy colonials. In fact, both Chinese and Western Shanghai residents, as well as those from other places such as India, played important roles in cementing Shanghai’s world city status.

As an urban center assertively part of the wider world, Shanghai was a magnet for the region’s and world’s elites. Domestically, the most talented and internationally minded artists and intellectuals went to Shanghai to visit or live; internationally, the city drew globetrotting writers—from Langston Hughes to George Bernard Shaw—who were interested partly in interacting with these Chinese figures drawn into Shanghai’s orbit. Beyond cultural elites, the city was attractive to many other Chinese individuals—from revolutionaries to chefs—who found it appealing to be in such a sophisticated milieu, in China but not completely so.

Bund on a rainy night (2018). Photograph by James Carter

It was no accident that “Paris of the East,” “New York of the West,” and “China’s Hollywood” were all among early 20th-century Shanghai’s nicknames. Nor that local Chinese punched far above their weight in their architectural and aesthetic influence. There was a special “Shanghai style,” a distinctive East-meets-West hybrid aesthetic approach to everything from fashion to food, which made an impression on people living in other parts of the country and in Chinese diaspora communities around the world.

Even though Shanghai was never a formal colony, its cosmopolitanism was possible because it existed outside the sovereignty of all nation-states. Shanghai avoided the worst deprivations of the Second World War (even, famously, racing its horses under occupation), yet it was during that regional and global conflict that the city finally lost its special status. The legal protections foreigners enjoyed ended in the 1940s, when the city first came under relatively unified rule, first by the Japanese military and Chinese administrators taking orders from Tokyo, then by the Nationalist Party of Chiang Kai-shek.

By 1949, the final blow to its special status came as the city was incorporated into the People’s Republic. The new state was run by a Communist Party whose central missions included ridding China of all traces of “colonial” and “feudal” taints. Everything that had made Shanghai exceptional suddenly became a liability.


Hong Kong’s Day

It was no coincidence, then, that Shanghai’s mid-century decline was matched by Hong Kong’s rise. People, including writers and artists, and resources, including bank reserves and a stock exchange, abandoned Shanghai for new homes in the south, in the hope of finding a more open and international outlet in the Pearl River Delta.

Hong Kong’s colonial status had once made it seem hidebound and conservative. But now the city boomed with the infusion of new people and new money, and its rise was helped along by its being, for a change, a freer and more dynamic place than its longtime adversary to the north. Until recently, this frisson of exiles and internationals dominated international and domestic perceptions of the city.

At the turn of the millennium—when Hong Kong began formally promoting itself as “Asia’s World City” and had filmmakers and movie stars who were admired across the planet—there was no question that it was a more global hub than Shanghai. Yet the need to make that proclamation hinted at fragility. In 1984, London and Beijing agreed that China would resume sovereignty over Hong Kong in 1997. Even though the former colony’s “way of life” was guaranteed for five decades after the Handover, some worried that Hong Kong, like Shanghai before it, would lose its international status as it became subsumed within the PRC.

All through the 1980s and 1990s, Hongkongers of means began hedging their bets, buying real estate and establishing residency abroad (just as many Shanghai people had done in the 1930s and 1940s). Some who stayed past 1997 found ways to fit into and even flourish in the new order, but others began to regret their decision (a phenomenon that also had Shanghai precedents). What would become of the city’s unique freedoms and culture in the decades to come?


Shanghai’s Return

While Hong Kong worried, it was Shanghai’s turn to boom again. Even though the rule of law and freedoms of all sorts were still much stronger in Hong Kong than in Shanghai (as remains true today), the mainland city took off in the 1990s and early 2000s.

The new soaring skyline in Pudong (East Shanghai), with buildings on formerly undeveloped land, literally overshadowed the old HSBC headquarters and its neighbors and became the symbol of the New China’s economic growth and development. Foreign companies began to wonder if Shanghai’s future might be the smarter bet. This sense increased as protests broke out in Hong Kong in 2003, 2012, 2014, and most of all in the wave that began in mid-2019 and continues into 2020.

Hong Kong once offered safe haven to Old Shanghai’s most cosmopolitan residents, but New Shanghai does not offer that kind of safety in turn.

The relationship between the two cities has varied: always strong, rarely stable, and often unpredictable. For example, Beijing claims to have saved Hong Kong from colonialism late in the 20th century, just as it had liberated all parts of the mainland, including Shanghai, from a “semifeudal, semicolonial” condition before that. But many in Hong Kong now see China not as a liberator but as a new colonizer working through puppets—not so very different from the general view in Shanghai in 1937 and 1941, when Japan claimed to be ending foreign rule but was seen as a new colonial power, governing partly through puppets.

An unstable international order, daily threats made by great powers on both sides of the Pacific, and worries about a possible global conflict to come: these are just some of the similarities connecting the situation of Hong Kong today with that of Shanghai in the middle of the last century. But above all else, what the two eras have in common is uncertainty amid opportunity. By the 1930s, Shanghai had been surrounded by conflict and chaos for decades but had known only continued economic growth. The same could be said of Hong Kong in the 2010s.

It is easy to look back at the people who could have left Shanghai before it became part of the PRC but did not, and wonder how they missed the signs. Yet the same can be said of Hong Kong today. Should 1984 have been the warning? 1989? 1997? The Umbrella Movement? The 2018 opening of a high-speed rail station in Hong Kong where mainland security agents are in control? The many weeks in 2019 when tear gas filled the air? What should be the tipping point? When would you leave?


Twin Cities Today

It is ironic that as (or if) Hong Kong loses world-city status, Shanghai is renewing its bid for it, even though it is fully a part of the state whose expanding power Hong Kong now frets about. But the trend lines for the two cities are far from clear.

Recently, Carrie Lam, Hong Kong’s chief executive, embarked on a charm offensive in Davos, at the World Economic Forum. In an era when Hong Kong’s brand of globalist capitalism is often under attack, Davos continues to celebrate it. Lam used the occasion to emphasize Hong Kong’s continued openness, buttressed by the rule of law, pretending that the violence in the city was all the work of protesters—not often the work of police or thugs.

Pudong skyline at night (2018). Photograph by James Carter

But even as the conference opened, Moody’s downgraded Hong Kong’s bond rating, a move that Lam called “disappointing,” not least because of Moody’s “assessment of the Hong Kong situation, and their comment on the weak institutions and governance.” Just as blows to Shanghai’s international status helped Hong Kong in the middle of the last century, this kind of strike against Hong Kong could help Shanghai now.

Meanwhile, though, Shanghai’s surge in wealth and status has not been matched by global cultural influence. Hamstrung by authoritarian rule and restrictive media policies, Shanghai still seeks the creative cachet Hong Kong has enjoyed for decades. Even amid the protests, art and creativity flourish in Hong Kong, while stability and order have not bred a similar industry in Shanghai. Nostalgia for the Shanghai Style of the 1920s is alive and well, but a forward-looking creative vision has not emerged on the Yangtze Delta.

It is also important that Hong Kong and Shanghai have never done their complex tango on the regional dance floor in isolation. Tokyo has long had a case to make as Asia’s true world city, and in recent decades Singapore and Seoul have emerged as potential claimants of that status. In the PRC, Shenzhen has sometimes been touted as a potential rival to Hong Kong for the title of leading Pearl River Delta metropolis. However, Beijing’s dream now seems to be to roll together all of the urban centers in that region into an integrated “Greater Bay Area” that is a kind of global megacity.

Package for a “Big Bay Area” SIM card, which can be used to make calls, send texts, and access the internet from a mobile phone used in Hong Kong, Macau, and nearby parts of the Chinese mainland (2019). Photograph by Jeffrey Wasserstrom


Freedoms and Futures

As we near the halfway point of Hong Kong’s 50-year guarantee, what is the current state of the rivalry between the cities? Early post-Handover hopes that mainland cities, including Shanghai, would become more like Hong Kong—rather than the other way around—have proved a mirage. Shanghai’s skyline glitters, but the style often seems hollow. Hong Kong’s creative streak has stayed strong, but controls keep tightening in ominous ways.

At Hong Kong’s airport—itself an emblem of local pride and a product of post-Handover striving—the “Asia’s World City” sign that greets new arrivals feels a little pleading, if not quite desperate. Still, the claim would seem out of place in Shanghai’s Pudong airport, or at least no more apt than in Singapore, Seoul, Tokyo, Taipei, Manila, or Mumbai. For now, Hong Kong remains some kind of world city.

A billboard at Hong Kong International Airport (2016). Photograph by Jeffrey Wasserstrom

Headwinds may stall this rivalry—between Hong Kong and Shanghai, among all the rising cities of Asia against one another—for a time. The international trends toward authoritarianism, protectionism, and isolationism are at odds with the cosmopolitanism that is at the root of Shanghai’s and Hong Kong’s historic successes.

We began by referring to some denizens of Hong Kong, pondering the pros and cons of leaving behind a beloved city. And then we compared those worrying in the present to those who considered exiting Shanghai decades ago (who, ironically, often saw rival Hong Kong as a logical place to seek refuge and rebuild their lives).

Maybe this is framing the question the wrong way. Maybe now it’s less a matter of when to go than where to head. Leaving only makes sense if there is somewhere to go (setting aside for the moment the restrictions on travel of any kind brought on by the global pandemic). Some in Hong Kong may feel that the city will soon be so changed that it is time to leave, but still not be sure where to go. Hong Kong once offered safe haven to Old Shanghai’s most cosmopolitan residents, but New Shanghai does not offer that kind of safety in turn. Where can freedom-loving, cosmopolitan city dwellers look to? What cities, across the entire world, seem safe bets for prosperity, openness, freedom? Those leaving Hong Kong recently have been more likely to head to Berlin or Taipei than to Shanghai. But they ask: How long can those cities offer security?

The lack of options adds to the sense of a last stand, which many protesters in Hong Kong now have. This is one of the reasons they keep taking to the streets. They do so in a city where banners boosting the metropolis as “Asia’s World City” are sometimes hidden, not by harbor haze or Hong Kong’s trademark typhoon rains, but by tear gas.


This article was commissioned by Sharon Marcus. icon

Featured image: Chinese refugees streaming over Garden Bridge onto the Bund, Shanghai, August 14, 1937. Image courtesy of Historical Photographs of China, University of Bristol (