INTRODUCTION

The history of Shanghai's industrialization since 1949 has two particularly interesting aspects. On the one hand it is an important and still imperfectly understood part of China's overall economic development; on the other, it is a story of comparative interest for those concerned generally with the relationship between urbanization and industrial growth and the role of large cities in poor countries.

With regard to the first, it is widely known that Shanghai is China's largest industrial city, and many are also aware of work emphasizing that, in some senses, Shanghai is ‘exploited’ by the rest of the Chinese economy. Quite why, in spite of policies to change the spatial distribution of industry, Shanghai still accounts for such a large share of China's industrial output, and how much and by what mechanisms Shanghai contributes to China's financial and economic development are, however, still far from clear. In the course of this essay I hope to throw some further light on both these points.

Turning to the general theme, our starting point is the observation that since the end of the Second World War the speed and economic characteristics of urbanization have differed from those illustrated in the experience of the early and second generation industrializers. First, the pace of urbanization has become very rapid. Whatever cut-off point is taken to define ‘urban’ (i.e. concentrations of 20,000, 50,000 or 100,000 persons), the rate of increase of urban population is usually in the range of 4%–6% per annum.