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Hip, hip, Shanghai

Billed as Asia's city of the moment, multinationals find plenty of old and new reasons to visit and to do business here.

By LIAM McMILLAN
© St. Petersburg Times
published January 12, 2003


He stood in the corner of the candlelit bar at midnight: Blond slicked-back hair, snug black jeans, a white T-shirt tight enough to show off his six-pack abs, and blue reflective sunglasses. In between upward glances to check out the other patrons, he was painstakingly inputting data into his BlackBerry, one of the latest high-tech gadgets for the moneyed cool set.

No one threw a beer bottle at this poseur, which is proof he wasn't lingering at the dive bar Tiny Tap in Tampa or the underground rock club CBGB in New York City. Instead, he was at Face, the hippest nightspot of the moment in Shanghai, which is arguably the hippest city of the moment in Asia.

Set in a 1936 mansion in the tony French Concession neighborhood, Face is where Shanghainese goddesses with red lipstick mingle with over-the-top, gay, New York artists who are best friends with European venture-capitalists prancing about with women who fancy themselves as Marlene Dietrich in 1932's Shanghai Express.

And they all seem to know the foreign correspondents who sit, sloshed, on the Ming dynasty couches (copies, one hopes) in the dark corners.

The restaurants at Face serve northern Thai and Indian food, designed to look good on the plate as well as your waistline because the portions would starve a parakeet.

Doesn't sound very "Chinese," does it? Check your ideas of China at the door, for this is Shanghai, a city with a past.

Its reputation as home to the swinging set of Russians, Britons, Americans and Japanese did not put it in good light with the Communists during the Cultural Revolution. But what many Chinese may still regard as that dark history is precisely one of Shanghai's selling points to multinationals now.

Westerners feel at home here and so multinational corporations are setting up shop in the city.

You can order what is arguably the best lamb shank and mashed potato this side of Dublin at O'Malley's Irish Pub in the French Concession area. But you can also find the British beer Boddingtons in what otherwise appear to be Shanghainese bars not catering to Westerners.

Double lattes are sold in coffee shops, which are on just about every other corner. Street signs are written in English as well as Chinese.

This easy access is marvelously convenient for the tourist, but of course it also represents a globalization that makes the world a tad more beige, and thus far less colorful.

Visit now, before the charm of old Shanghai disappears to make way for modernization. Wander the tight lanes, where food vendors stand on corners and sell from pushcarts full of dish rags, Tupperware and kitchen utensils. Here, barbers work on the street, shaving men with straight razors for less than a $1. And elderly handymen wander along, yelling out to anyone who will listen that they are for hire.

In these vanishing neighborhoods, where cornerstones date buildings to the 1920s, singing birds are left in cages on first-floor windowsills, chickens wander the streets and elderly folk sit on stools on the sidewalk, watching life unfold.

These scenes speak of old Shanghai. But towering above such neighborhoods are the far more sterile (yes, and more hygienic) high rises that shut out the sense of community and history.

After the British won the Opium War in the mid 19th century, Shanghai became one of five "treaty ports," permitting Westerners to settle in the city. It thus served as a major gateway to inland China.

Opium traders and other "entrepreneurs" from Europe and America flocked here, but so did refugees: White Russians fleeing their own Communist-led revolution and Jews fleeing Nazism.

It was said in the early 20th century that no one ever asked foreigners why they were in Shanghai -- it was assumed they were fleeing something.

Because of an international charter, essentially forced upon the Chinese, Shanghai did not demand visas. It was literally the last port in a storm -- until 1949, when the Chinese Communist revolution prevailed and evicted foreigners.

After 1949, most foreign business firms moved their offices from Shanghai to Hong Kong, where the British were still in power until 1997.

But the Communists did not destroy the old French Concession of Shanghai, a neighborhood boasting homes that could easily have been set in the English countryside, complete with walled-in gardens.

Nor did the new government leaders destroy the art deco buildings along the Bund on the waterfront. Now, cadres, rich Chinese businessmen and multinationals are moving into many of these colonial-style buildings.

But for every one building saved, another is razed. And the old Chinese neighborhoods of two-story houses along narrow streets are increasingly replaced by high rises.

The reason for the rapid change in Shanghai is, of course, China's growing economy. It expanded an estimated 8 percent in 2002, on top of gross domestic product growth of 7.3 percent in 2001 and 8 percent in 2000. Compare those figures with the declining world economy during that time.

Those are gains that continue to draw western companies to China, primarily to Shanghai and Beijing. Shanghai's economy alone alone surged by 10.9 percent in 2002.

Although that growth spells opportunity, there are significant concerns, too: The nation's budget deficit is growing, and its exports will likely taper given that both the U.S. and the Japanese economies -- China's biggest markets -- are struggling. Also a banking crisis looms.

Still, the Chinese Dream is far from dim. Many of the people who are plunging into the scene on the mainland are the Old China Hands of Hong Kong. Brits mostly, these executives have spent the past five, 10 or 20 years in what is now known as the Special Administrative Region.

A prime reason for the shift of interest and capital to Shanghai is that Hong Kong's economy in 2002 posted record unemployment, record personal bankruptcies and the ensuing cultural phenomena that often go hand-in-hand with financial woes: record divorce and suicide rates.

The result in Shanghai, however, is a city dancing with the delight of being the "it" town.

You cannot miss them: Shanghainese businessmen and Mandarin-speaking Western entrepreneurs who know their way around China are finalizing deals that leave all involved smiling, on their way to Face.

-- Liam McMillan is a freelance journalist who lives in Hong Kong.

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