The Taipings did not take Shanghai, but the Chinese part of the city was
occupied by the Cantonese and Fukienese dock workers and by sailors of
the Small Swords Society. Between 1855 and 1865, the population of
the International Settlement swelled from approximately 20,000 to
90,000. The French Concession at the same time gained about 40,000.
The foreign consuls and residents viewed this influx of Chinese with
alarm and set up the first Municipal Council of the international Settle-
ment on July 22, 1854, in part to deal with the emergency. ³

The newcomers to Shanghai in the 1860s included a large number of
gentrymen from such leading Jiangnan cities as Suzhou, Nanjing,
Songjiang, and Hangzhou -- all elite refugees from areas that had fallen to
the Taipings. When these men fled to Shanghai, they brought their
wealth and cultural tastes with them. New styles of cultured life began to
appear in Shanghai's concessions, and by the time the Taipings were put
down, many of the newcomers had come to regard Shanghai as a new
home. Movements of this sort, along with the changing patterns of trade
and transportation after the opening of the treaty ports, were largely
responsible for the long-term shifts in Jiangnan's regional geography. By
the third quarter of the nineteenth century, Shanghai had emerged to
become the leading metropolis of the lower Yangzi Valley. Traditional
Jiangnan cities lost their preeminence as traders went elsewhere, artisans
emigrated, and the gentry were attracted to the new cosmopolitanism of
Shanghai.

Commerce expanded and light industry developed in Shanghai at the
turn of the twentieth century. Along the Bund stood the imposing high-
rise offices of major Western banking corporations and trading houses.
In the early stage of modern urban development many firms on Nanjing
Road and the cotton mills along Yangshupu were financed mainly with
foreign capital. Although the first Chinese-owned machine-powered
rice-grinding concern was founded in 1863, indigenous industrial capital-
ism was repeatedly hampered by structural weaknesses in the investment
environment that led to major recessions such as the one engendered by
the credit crisis of 1883. ⁴ Between 1915 and 1919, when the European
powers were engaged in war, however, Shanghai's light industry enjoyed
a major boom. The benefits were shared primarily by Japanese and
Chinese investors. Flour mills, shipping concerns, textile mills, silk

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