Shanghai Surprise

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Byline: Melinda Liu

Next month's eye-popping World Expo heralds the city's resurgence--and perhaps a bruising new chapter in U.S.-Sino relations.

A new and supremely confident symbol for the city of Shanghai is supposed to be unveiled soon on the historic riverside esplanade, the Bund--presumably by May 1, when the 2010 World Expo will open. It's a gigantic bronze bull created by Arturo DiModica, the Italian-American artist who gave Wall Street its famous mascot, Charging Bull. Press reports have said the Shanghai beast will weigh almost twice its New York brother's 7,000 pounds, and size isn't the only difference. The one on the Bund will be "younger and more energetic, symbolizing the energy of Shanghai's economy," according to local government official Zhou Wei. "Its head will look up, while the Wall Street bull looks down."

It seems as if we're always hearing boasts like that from China's supposed city of the future. But what most outsiders don't realize is that Shanghai's fate has risen and fallen and risen again, along with its political fortunes. The 70 million or more tourists who are expected to visit the expo over the next year will enjoy the results of a $40 billion makeover--new air terminals and ring roads, and more than 150 miles of new subway line, along with an entirely new waterfront district carved out of docklands and old industrial facilities. The transformation reflects the comeback of the city's brash patrons, the aggressive, antidemocratic political clique known as the "Shanghai gang."

For those who read tea leaves in China, the revival is striking. Back in 2006, when runaway real-estate development was driving people out of their homes and exacerbating Shanghai's rich-poor divide, the central government in Beijing pushed back. Shanghai's powerful Communist Party boss, Chen Liangyu, was dismissed and then convicted for graft and other abuses of power. Major construction projects were shelved or canceled outright. But now the reopening of the money spigot is being taken as hard evidence that the Shanghai boys have regained national influence. Besides projects related directly to the expo--the modern version of the World's Fair, held once every five years--there are signs that megaprojects like the $5 billion magnetic-levitation rail line from Shanghai to Hangzhou are back on track. Real-estate speculation has resumed, with March housing prices up nearly 12 percent from the previous year. And Beijing has officially given its blessing to Shanghai's greater ambitions--to be a global financial center and a nexus for international shipping and logistics by the end of the decade.

The Shanghai faction has no official status, being little more than a loose coalition of officials united by freewheeling economic views and a tough stance on foreign policy. Many of its leading figures are the offspring of veteran revolutionaries, with close ties to the military and public security establishment. In the language of Chinese power rivalries they're part of an "elitist" group that includes well-connected "princelings," in contrast to the "populists" allied with President Hu Jintao and Prime Minister Wen Jiabao. But the terms can be confusing: these populists pursue social justice but avoid rabble-rousing and demagoguery, while the princelings and elitists are by no means too refined for a knock-down, drag-out fight with the rest of the world. …