Capitalism, Shanghai-style, thrives again

Clinton plans to focus on China's economic progress and potential during his visit to Shanghai

• 'A city willing to accept new things'
• Shanghai's economic boom slows
• Related stories and sites

SHANGHAI, China (CNN) -- For almost half a century, Shanghai was a city in suspended animation, frozen by the Communist revolution. But no longer. The latest stop on President Clinton's visit to China, and the one-time financial capital of the Orient, is booming again.

News: • Clinton takes tall agenda to China • Visit fuels debate over Sino-U.S. policy Background: • The politics of engagement: U.S. and China since 1949 • China's challenge: Shaking the 'Asian flu' Interactive Features: • Who's Who in U.S.-China relations • President Clinton's Itinerary Streaming Video: •Clinton explains why he’s going to China • A CNN Special Event: The Legacy of Tiananmen

Shanghai is where Clinton plans to focus on China's economic progress and potential. The city at the mouth of the Yangtze River is at the forefront of China's exploding experimentation with liberalization and free markets. For example, Shanghai has:

• China's most important stock exchange, the most modern in the world.
• A round-the-clock construction boom.
• Billions of dollars of international investment.
• A reputation as the meeting place of East and West, where glittering shops, conspicuous consumption and risquè night life contain more than a few echoes of its decadent past.

'A city willing to accept new things'

In a remarkably short period, a once-proud city humbled by decades of communist misrule has regained its confidence and the style that has long made it China's most cosmopolitan city.

Yang Qingqing's business is style. A pioneering image consultant working from her Shanghai studio, she teaches women about makeup; coaches models about fashion shows; and publishes what are, by Chinese standards, provocative books and magazines.

Yang couldn't have done it anywhere else in China. "Shanghai is a city of imagination, a place that gives people fantasies," she told CNN. "It's a city willing to accept new things and ideas. You can't resist it."

Yang is far from alone in her outlook, as indicated by random interviews on a Shanghai street:

• "We Shanghainese are different," says one woman. "We're willing to embrace change, to communicate with the outside world."
• "We work harder," says another woman. "And we're just smarter."
• "We're very good businessmen, very good," adds a Shanghai man. "We'll do business with everyone."

Shanghai's economic boom slows

But after six years of double-digit growth, business is not so good right now:

• The Asian economic crisis has slowed international investment.

  Urban squalor can also be found in Shanghai

• The building boom that transformed the city skyline has turned into a potentially destabilizing property bubble.
• Unemployment is rising; laid-off factory workers eking out a living as street peddlers is increasingly common sight.

Shanghai, then, is a city of contradictions -- a place where urban squalor and heightened social tensions can be found alongside unprecedented prosperity and visions of the good life.

As China's stunning transformation proceeds, Shanghai's fate will offer important clues to the country's future.

As the old saying here goes: If you want to know what's happening in China now, look at the capital, Beijing. If you want to know what's going to happen, look at Shanghai.