THE ROVING EYE
Shanghai rocks!
By Pepe Escobar

SHANGHAI - Right now no destination, except perhaps Bangkok, can even dream of rivaling Shanghai as the most exciting city in Asia. If "to get rich is glorious", according to Little Helmsman Deng Xiaoping's unforgettable war cry, nowhere is getting rich more glorious than in Shanghai. The city has discarded its Mao suit in favor of a silk bikini: rather, it's wearing a designer Shanghai Tang silk Mao suit over the silk bikini and high heels instead of traditional Chinese shoes. It's still retouching its makeup and will soon be ready for its close-up as the deluxe pinup of global capitalism - a superb "international economic, financial, trading and transportation center", as the office of Vice Mayor Jiang Sixian puts it. The Chinese diaspora, clad in Prada, sipping dry martinis and chauffeured around in black Buicks made in Shanghai, is unanimous: the atmosphere is as intoxicating as New York immediately after World War II.

The best way to observe the frenzy is to go to heaven. "Heaven" in this case is the observatory of the Jin Mao Tower - 88 floors, 420 meters high, reached in only 48 seconds by a Mitsubishi elevator. Until recently, the view from the top was similar to that of a bombed Sarajevo or Grozny. Now, dozens of high-tech towers have sprouted around the Jin Mao. The Jin Mao, China's sexiest tower, is the third-tallest in the world. From the 50th floor up, it's occupied by a Grand Hyatt, billed as "the tallest hotel in the world", a fake art deco prodigy, revisited for the 21st century by Japanese design. Shanghai's hippest, lounging in the 80th-floor swimming pool, can only feel - literally - on top of the world.

Asia-Pacific Economic Cooperation (APEC) summits such as the one held in Bangkok last week are usually an Asian stage for US presidents, but this year, no matter the spin, the real star of the show, from an Asian point of view, was China. As a cluster of Asian diplomats made it very clear off the record, George W Bush tried to evade the real problems of the US economy and massive domestic job losses by switching the focus of the summit to "terror" and blaming China for a supposedly undervalued yuan. But Chinese President Hu Jintao, only seven months in power, resisted all kinds of Washington pressure. Beijing - in fact supported by all Asian nations - argues that the yuan exchange rate definitely is not responsible for the US trade deficit with China. Hu stressed that "we must be responsible towards our neighboring countries". Bush was left with a wry smile in his Thai silk suit.

Shanghainese businessmen - who know all too well what's really happening since APEC 2001 in Shanghai - put it very succinctly. China went to APEC 2003 in Bangkok as already a de facto leader of Asia - ever more involved in trying to couple its economic dominance with a benign political supremacy over the whole region. Exports from the Association of Southeast Asian Nations (ASEAN) to China have grown 55 percent in the first semester of 2003. Trade between ASEAN and China grows much faster than trade between Asia and the United States. In Japan, Chinese imports already surpass US imports. Japanese exports to China also are growing. The same applies to Chinese bilateral trade with South Korea, Thailand, Malaysia and Singapore. The big picture shows the clear configuration of a Chinese regional political economy. From the point of view of Beijing - and also Shanghai - the advantages are enormous. China will be less dependent on the US market, ergo less vulnerable to Washington pressure. Commercial interdependence with the rest of Asia will act as a buffer between China and the US.

If China's "socialist market economic system" - according to the Chinese Communist Party (CCP) definition - is a success, Shanghai, as the perennial apex of Chinese style, sophistication and commercial sense, is its ultimate success story. Since the early 1990s the city has been immersed in one of the most spectacular economic expansions in history: on April 18, 1990, the CCP, insisting on the instruction of Deng Xiaoping's theory, ordered Shanghai to start rocking (again). The result so far can be contemplated from Jin Mao heaven - and it's a masterful lesson in historic deconstruction.

On the other side of the sinuous Huangpu River - under a perennial fog trespassed on by the horns of cargo and tugboats - sit the late 19th and early 20th centuries: the legendary Bund esplanade and its historical buildings such as Customs House, the Cathay Hotel and the old headquarters of Hong Kong and Shanghai Bank. On this side is the city of the future: Pudong's special economic zone, still highlighted by the multi-scintillating Jetsons-style Oriental Pearl TV tower, unbeatably dubbed by Fidel Castro as "the vertical Wall of China". In the early 1990s there was nothing except rice paddies in Pudong. Ten years later, Pudong was concentrating no less than 40 percent of the volume of construction in the whole of Asia.

Shanghai's spectacular success is owed in a large measure to years of work by Mayor Xu Kuangdi, a cosmopolitan engineer and professor who upgraded the city's infrastructure from the 19th to the 21st century. Pudong's French-designed high-tech airport opened in 1999. The first Chinese commercial line of magnetic levitation (maglev) trains should be completed soon, covering the 33 kilometers from Pudong to the new airport at 400km/h.

Jiang Sixian, vice mayor of Shanghai, secretary of Pudong's Party Committee and the top official in charge of Pudong, is proud to name the "four centers" that should constitute the framework of an "extroversive, multi-functional and modern city": Lujiazui Finance and Trade Area, Jinqiao Export Processing Area, Waigaoquiao Bonded Area and Zhangjiang High-Tech Garden. Lujiazui is the heart of Pudong - bank headquarters used to be in the Bund, but by decree almost all of them relocated to Pudong. Since 1997 the stock exchange has also been in Pudong - a post-modern exercise in aluminum and blue glass echoing the Arc de Triomphe in Paris. A "Bund tourist tunnel" - complete with mini-cable cars, piped music and cheesy laser special effects - links both sides of the city under the Huangpu.

One of the targets for the High-Tech Garden, which according to the vice mayor's office is attracting "domestic and foreign information technology, software and biopharmaceutical industry", is to turn Pudong before 2006 into a center of production of semiconductors capable of rivaling Taiwan and South Korea. Pudong is a magnet for attracting the best and the brightest in China: rules approved in 1999 facilitate to holders of MBAs and doctorates, younger than 35, the extremely complicated permits for residence and work in the city. They crave the ultimate Shanghainese status symbols: a condo in - where else? - Pudong with a silly European name, and a black Audi.

The ambition of Shanghai's elite is almost unlimited: they want an elite global metropolis on the same level of New York, Paris, London and Tokyo. There are plenty of additional assets: a look at the map reveals how Shanghai is the gateway to the heart of China. Nothing separates Shanghai from landlocked provinces. It's possible even to navigate into Tibet.

Everywhere the melancholic atmosphere of a Liverpool or a Manhattan in the 1920s, impressed on a few monolithic pseudo-classic facades, is overwhelmed by the devastation inherent to the largest construction site on the planet. The old generation - still living in shikumen (colonial houses) - draws a parallel to the Sino-Japanese war, when the city was bombed in 1937. Even Shanghai's old city - which reminds one of a faded Chinatown in Malaysia or Vietnam - is not immune. Until the triumph of Great Helmsman Mao Zedong in 1949, Shanghai was bisected by foreign powers: these neighborhoods that resist the Caterpillar machines faintly evoke an early-20th-century Europe that decades of Stalinist pseudo-architecture could not erase. Historic ironies abound: the supreme relic of imperialism - the Bund - has been turned into a light show, put up by "market socialists" to the benefit of tourist hordes.

Little Helmsman Deng Xiaoping's brilliant idea was to mold Shanghai to the image of Singapore - taking a cue from Southeast Asia's Confucius, Singapore's elder statesman Lee Kwan Yew: an economic powerhouse under rigid political control. For the past 10 years, Shanghai has grown as much as 14 percent a year. It still grows at 10 percent a year. Pudong, according to the vice mayor's office, is growing at a staggering 19.6 percent a year: its gross domestic product (GDP) in 2002 was about US$16 billion, and it is bound to quadruple before 2010, when China hosts the World Expo. Shanghai's per capita gross national product (GNP) is fast approaching $7,000.

Shanghai is the fundamental microcosm to put in perspective all of China's crucial vectors. It generated the first Chinese urban proletariat. It generated revolutionary politics itself: the CCP was founded in Shanghai in July 1921, in a pink house on the former French concession, today a museum. Mao launched the Cultural Revolution in Shanghai, in 1966. The Red Guards even proclaimed a Shanghai Commune. Shanghai was the last barricade of the infamous Gang of Four.

As late as this March, China was led by the so-called "Shanghai Mafia": president Jiang Zemin as well as prime minister Zhu Rongji were formerly mayors of Shanghai. Everything that former economic czar Zhu foresaw in the early 1990s, when he was mayor of the city, became real. Zhu ordered the construction of tunnels and bridges to link Shanghai to the - at the time - virgin fields of Pudong. He ordered the mass demolition of old buildings and the mass transfer of factories and people to satellite communities. He promised less bureaucracy to do business and he opened the doors to foreign investment. The CCP, following Deng's brilliant idea to the letter, has identified the future of China as a mix of theme park and planned community - complete with electronic birds singing through Bose speakers, as in many Shanghai malls. What would Mao say? His quotations anyway still sell briskly for 40 yuan (about $4.80) in impromptu street markets that soon will go vertical, in glass and steel.

A large proportion of the Chinese diaspora emigrated from Shanghai to make a fortune in Hong Kong, Southeast Asia and America. As Shanghai was instrumental in building the fabulous wealth of Hong Kong, today Hong Kong's capital and savoir faire help to reconfigure China's maglev train. For irreverent Swiss financial guru Marc Faber, Shanghai will knock out Hong Kong. Shanghainese traits of masonic solidarity and iron determination inspire respect and fear all over China. A businessman confides that true Shanghainese consider Cantonese no more than "rice-eating monkeys": they only made it because of the benign vigilance of the British, who kept them safe and colonized for a century and a half.

The new Silk Road starts in Shanghai. Barring bureaucratic problems in Central Asia, soon it will be possible for goods and people to travel non-stop by rail from Shanghai all the way to the big European ports of Rotterdam and Antwerp. Another Shanghainese businessman is adamant: "There's no future for the Pearl River Delta. It cannot be compared to the Yangtze. The Yangtze is everything to China. And what we are doing here, we are doing it all by ourselves. Even if we learned it from foreigners." Shanghai is the essence of modernity, Chinese-style, as much as China considered itself modern before Western barbarians arrived in their ships. As everything that refers to Asia, the snake once more bites its own tail: Foreigners may have been sovereign, but they were, above all, ephemeral.

As much as young, upwardly and extremely mobile Shanghainese dream of 2010, when the city "will be ready", the dark side of all this modernity is inescapable. At least 12 million state employees every year are thrown out in the middle of the street in China, with no safety net. All dream of success in Shanghai. Unlike Bangkok, the city has not deported its beggars - at least not yet. Pudong officials, for their part, are very worried, saying that "even with the steady rise of unemployment, we cannot recruit more skilled workers. We have a deficit in human resources, because our industries developed too fast."

Under the high-tech gloss and the love affair with all things vertical, serious lowlifes also prosper in Shanghai, true to its legendary Sodom and Gomorrah 1920s image. Infamous Maoming Nan Lu, where dragon ladies in faded denim attack gullible gweilos, is just the tip of the iceberg: these are schoolteachers and registered nurses who complain about their day jobs and dream of a shortcut to getting gloriously rich. Underneath these bars and nightclubs there lies a complex maze of gangsterism, drug trafficking, secret societies, gambling and prostitution - with plenty of involvement by the police and the military. The 1920s Shanghai - with its brothels the size of factories, opium dens as common as teahouses, hordes of spies and subversive types and battalions of stunning Russians fleeing the Bolsheviks - is being replayed in a new set with a new cast. With a major difference: the opium dens have disappeared. But it's possible to buy impure opium - and smoke it in a silver pipe. Plenty of instances of public, legalized debauchery, under the guise of "entertainment centers", are easily available. Once more, mind-boggling Chinese modernity has reproduced old alliances among organized crime, the law and the government.

The key point is that the whole system still holds. Practical Shanghainese know that any sudden change would lead to enormous social disorder or even a civil war. To try to keep up with this microcosm of modern China today is like watching the replay of the same video: an Airbus fully loaded trying to land in a strip in the jungle. The strip is there. The pilots have iron hands. And nobody fears that the plane will crack. In fact everybody is already preparing the bubbly to commemorate the landing. Where? In their fully loaded condo in Pudong - where else?

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