It goes without saying that the development of every location, either city or the entire state, is always closely related to its geographical characteristics. In particular, geographical position of a city defines the political and economic structure of the community that inherits this area. Therefore, endeavoring to trace the geopolitics of a certain location, it is appropriate to consider how valuable it is in terms of climatic peculiarities, natural resources, and population. Besides, in order to establish the link between city’s geography, history, and economic development, one should refer to the theoretical concepts of imperialism, colonization, neoliberalism, urban restructuring, and innovative economy. This paper will reveal and discuss the influence of geopolitics on the evolvement of Shanghai.
To be more precise, the purpose of this paper is to survey the development of Shanghai starting with the brief overview of its geographic location, weather conditions, and population growth. These objectives are important because they have impacted the city’s history and led to the adoption of neoliberalism (the direction in political economy). Besides, the above-mentioned factors have triggered the rapid urbanization. Apart from that, becoming the victim of the imperialistic goals of the western empires, Shanghai was doomed to undergo a long colonial history. Therefore, it is important to explore the manifestations and outcomes of the colonization of Shanghai, in particular, discuss the impact of westernization and industrialization on this city.
Moreover, the purpose of this study is to identify the contemporary level of the Shanghai’s economic development and modern tendencies, and link these characteristics to the city’s political economy. Furthermore, it is aimed at analyzing the process of the Shanghai’s urban restructuring in terms of neoliberalism establishing cause-effect relations between these concepts. In this regard, one should identify the government approaches towards enhancing urban accessibility and emphasize their meaning for the current and future well-being of the locals.
The rapid development of Shanghai is defined by its favorable geographical location, which was acknowledged by both China’s government and international colonizers (later, investors). In particular, Shanghai is a port city that connects a number of states through the marine roots of the Pacific Ocean. Moreover, the abundance of water reservoirs is ensured by the city location on the banks of the Huangpu River. In addition, there are a lot of lakes and harbors on the territory of this city as well as in its suburbs. In general, Shanghai includes 53.1 km (33.0 mi) of diverse water reservoirs (Shanghai 2010). It goes without saying that the proximity of water plays a crucial role in the city evolvement.
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Specifically, Shanghai has turned from a small fishing village into a megalopolis. It should be considered that “the total area of the city is 6,340.5 km2 (2,448.1 sq mi)” (Shanghai 2010), whereas, the land mass covers “6,218.65 km2 (2,401.03 sq mi); the water occupies 121.85 km2 (47.05 sq mi)” (Shanghai 2010). This peculiarity enabled the development of domestic and international trade and triggered industrial advancement of Shanghai. Besides, the proximity of the ocean, river, and lakes created the humid subtropical climate of this port city. While combined together, these geographical features define the flourishing of the beautiful flora and fauna that annually attracts a great amount of foreign visitors. Observing the climate of Shanghai, one can clearly distinguish all four seasons. The best time for visitors is during spring and autumn because these seasons are characterized with the warm and relatively dry weather. As for the other seasons, it barely snows in winter (a day or two of snowfalls per season), but frequently, the Siberian winds predetermine the windy winter weather. Unlike winter, summer is not windy but quite humid; besides, the high level of moist is always clearly perceptible in the air during the summer period.
Overall, the above-presented statistics proves that Shanghai is situated in the subtropical zone, whereas, the high level of humidity is defined by the abundance of water reservoirs in its vicinity.
The population of the city is more than 20 million (Shanghai 2010). Revealing the demographics of Shanghai, it is appropriate to stress the high ratio of urbanization (75, 3%); respectively, the level of rural population comprises 24.7 %. Furthermore, the gender correlation points that the amount of men is a little bigger than the number of women (50.4% males and 49.6 % females) (Shanghai 2010). Having undergone the three massive waves of population growth, Shanghai has presently a negative natural population growth, which is considered to be quite favorable because it helps avoid overpopulation.
It goes without saying that the colonial history of Shanghai is defined by its favorable geographical location. First and foremost, Shanghai’s status of a port city has had a crucial role for its development from the moment of its foundation. The map below displays the advantageous location, which enabled the establishment of numerous marine roots. This map demonstrates that using the naval connections assures easy and fast accessibility of the city for the nearby states and current major China’s partners, Japan, Korea, and Russia.
This valuable geographical position along with favorable climate is the main factor that attracted the western empires (Hudson 1972, p. 141). As a result, starting with the 17th century, China became the victim of the imperialistic aspirations of the western states. In particular, it was colonized by the British Empire, France, the United States, and later, in the 20th century, by Japan. This section is aimed at identifying and briefly analyzing the consequences of Shanghai’s colonial history.
To begin with, it is appropriate to mention that the industrialization of this city was triggered by the notion of westernization. Without doubt, the former dwellers of Shanghai underwent tough period of economic exploitation and excessive opium addiction. Firstly, China has lost the Opium War (1839-1842) to the British Empire and was forced to sign economically unbeneficial and humiliating agreements, The Treaty of Nanjing (1842) and The Treaty of Bogue (1843). The first treaty addressed financial obligations of the Chinese to the British, whereas the second regulation was an amendment to the first one and was signed to provide unlimited rights to the British citizens in China (The editors of Encyclopedia Britannica 2015).
Apart from that, several decades later, China lost the Sino-French War (1883-85) to France fighting for Vietnam (The editors of Encyclopedia Britannica 2015). It happened because China did not have imperialistic ambitions at that time and thus did not invest in a buildup of a strong military that could resist the foreign threats. As a result, the inability to protect own integrity, the loss of social identity, and imposed financial burdens led to the so-called Century of Humiliation.
What made the things even worse was that China underwent the Japanese invasion at the beginning of the 20th century, which was caused by the refusal of people to work for Japanese on unfavorable terms (Dorey 2009, p. 3). In 1932, this international conflict gained the size of a military confrontation, which the Chinese lost. Consequently, Japan exploited China’s resources until the end of the World War II.
Nevertheless, the positive aspect of these events was the establishing of the trade roots with Shanghai. It predetermined the expansion of this city that gained a world-wide popularity being one of the five treaty ports. Besides, the necessity to enhance the national awareness of the Chinese launched the Self-Strengthening Movement (1861–1895) (The editors of Encyclopedia Britannica 2015). The purpose of this trend was to improve the individual and social identity of the locals by reviving the native culture, traditions, and values. At the same time, this period was marked with the enhanced interest towards western technologies. Chinese people comprehended that the adoption of the foreign know-how could improve the process of industrialization in their own state. These goals triggered the process of trade liberalization and urban restructuring of this city.
State Restructurings and Urban Political Economy of Shanghai
Neoliberalism is a term that is used to characterize the tendency towards free trading and related processes. Becoming a rapidly developing megalopolis, Shanghai can rightfully be considered as a vivid example of neoliberalism. It is important to understand that, when the today’s trend of economic globalization collides with the unequally beneficial geographical development, the areas that posses the advantageous geographical characteristics tend to attract considerable capital. Thus, “each round of capitalist development is associated with a distinctive, historically specific geographical landscape in which some places, territories and scales are systematically privileged over and against others as sites for capital accumulation” (Brenner & Theodore 2002, p. 355). As the recent history reveals, Shanghai is one of such locations. The sections below are aimed at detecting, discussing, and explaining the major industries of Shanghai and linking their performance to the notions of neoliberalism and urbanization.
To begin with, it is necessary to survey the recent changes in relation to “per capita expenditure of urban household” (Hong Kong Trade Development Council 2014). Simply put, the following statistics reveals the percentage of annual expenses of an average Shanghai citizen. For instance, it is reported that in 2013 the natives spent about 35% of their income for food. Whereas it remains the most costly item, it has significantly reduced in price (for about 10%) comparing with 2000. It means that the general financial prosperity of the locals has considerably improved during the last decade. Consequently, it allowed to spend more on clothing (7.2% in 2013 as oppose to 6.4% in 2000). Moreover, it is important to indicate that Shanghai citizens started to spend less on medicine and medical services (4.8% in 2013 as compared to 5.6 % in 2000). This tendency can be explained by the general enhancement of the societal well-being. This statistics suggests the liberalization of commercial relations, both domestic and international. In its turn, trading relations trigger the necessity to advance other leading industries in a way that enables the maximum inflow of capital, which will be positively reflected in the quality of life.
For example, the ongoing increase of Gross Domestic Product (GDP) in Shanghai is defined by the prosperity of the three largest industries which are “retail and wholesale, financial services, and real estates” (Hong Kong Trade Development Council 2014). Acknowledging the necessity to meet the contemporary global requirements and accept the course on innovative economy, it is planned to develop “financial services, logistics, and cultural industries” (Hong Kong Trade Development Council 2014). In the meanwhile, Shanghai has the primary role in the heavy industries of China. It is worth mentioning that the two biggest steelmakers are located in this city and, as a result, in 2013, 78% of the gross industrial output was created by the heavy industries (Hong Kong Trade Development Council 2014).
What is more, evaluating the current market profile of this city, one should refer to the statistics that reflect the output share of key Shanghai industries in 2013. Aiming to satisfy the demands of the today’s humanity, the city is oriented on the hi-tech and modern industries. The statistics shows that “computer, communications, and other electronic equipment” comprise 15.9 % of the entire city’s gross industrial output, which is second to the leading automotive production (17.5%). The rest of it is shared between less profitable industries, such as the raw chemical materials and products (8.0%), general and electrical machinery equipment (7.5% and 6.4 % respectively), and smelting and pressing of ferrous metal (5.7 %) (Hong Kong Trade Development Council 2014).
Apart from the aforementioned, Shanghai is famous for a well-developed automobile production. The evolvement of this industry is due to productive collaboration between China and its neighboring Japanese and Korean partners. This peculiarity greatly corresponds with the modern global neoliberalism. In particular, the international cooperation accentuates the adherence of Shanghai’s government towards economic liberalization. At the same time, it indicates the connection between geographical location, capital growth, and neoliberalism.
Continuing to discuss the evidence of Shanghai’s urban restructuring, it is appropriate to stress that in the 21st century Shanghai underwent the restructuring of its industrial system. Specifically, endeavoring to keep pace with the technological progress, this megalopolis supports the development of the innovative technologies. Simultaneously, less attention is addressed to the low-profitable manufacturing industries, which earlier were the leading ones, such as “the textile and heavy-equipment manufacturing” (Hong Kong Trade Development Council 2014).
In addition, capital inflow is predetermined by the rapid growth of the financial industry of Shanghai. For instance, “by the end of 2013, there were 1,240 financial institutions, including banks, insurance companies, and securities companies, of which 215 were foreign-invested” (Hong Kong Trade Development Council 2014). Given the statistics, it is not surprising that this city has become the leading financial center of China. It attracts both investors and tourists from all over the world.
Without doubts, this city is known for high-tech industry development. For example, “the six key advanced industries (including electronic information product, automobile, petrochemical, fine steel, equipment complex, bio-medicine) accounted for 67.3% of the gross industrial output in 2013” (Hong Kong Trade Development Council 2014). The adherence to the modern industries guarantees that, in the future, the city will remain prosperous, famous, and attractive for numerous individuals from all over the world. It means that the capital inflow to Shanghai, which can be noticed nowadays, will continue.
Taking into account this idea, it is appropriate to underline the theoretical background of neoliberalism. In particular, it is considered that “cities have become the incubators for many of the major political and ideological strategies through which the dominance of neoliberalism is being maintained” (Brenner & Theodore, 2002, p. 375). Consequently, linking the theoretical agents of neoliberalism to the practical approaches and endeavors to enhance the well-being of Shanghai citizens, one can rightfully presume that this city will continue to experience the impact of neoliberalism. Furthermore, it becomes clear that this neoliberalism will lead to future accumulation of money in Shanghai.
This multi-leveled and multi-faceted process is also represented by ever-increasing foreign trade. Specifically, in 2013, the major overseas trade partners of Shanghai were “the US, the EU, Japan, the ASEAN, Hong Kong, and the Middle East” (Hong Kong Trade Development Council 2014). Besides, during the same year, this city “exported US$16.8 billion to Hong Kong and imported US$742 million from Hong Kong” (Hong Kong Trade Development Council 2014). This considerable statistics indicates the rapid growth of Shanghai’s capital.
Overall, the major economic indicators of Shanghai in 2014 were the following: from January to October 2014 GDP increased by 7%, whereas the value-added industrial output grew by 4.7%. Moreover, for the same period of time, the amount of retail sale rose by 8.7%. In addition, the correlation between exports (2.8%) and imports (8.5%) testifies that Shanghai tends to attract capital by actively conducting trades with other states (Hong Kong Trade Development Council 2014). It means that Shanghai supplies more products to its trading partners than consumes.
To a great extent, the development of Shanghai is being defined by the concept of contemporary urban politics (MacLeod 2011, p. 2630). In practice, it means that the city government adheres to the course of attracting “globally mobile investors alongside a creative class of professionals and revenue-generated tourists” (MacLeod 2011, p. 2630). This supposition is proved by the corresponding statistics for 2013 which shows that multinational corporations established “445 regional headquarters and 366 R&D centers in Shanghai” (Hong Kong Trade Development Council 2014). As a result, in 2013, foreign investments reached 16.8%, which is by 1.6% higher comparing with 2012 and more than twice bigger comparing with 2006 (7.11%) (Hong Kong Trade Development Council 2014).
Another example that accentuates the impact of neoliberalism, as a direction of political economy, on modern Shanghai is the concentration of numerous world-famous multinational retailers and franchised businesses. For instance, both tourists and the natives can enjoy a great variety of goods and services provided by such companies as “Carrefour, Walmart, Metro and Lotus Supercenter U2, G2000, Baleno, Bossini, Giordano” (Hong Kong Trade Development Council 2014). Besides, the above-stated multinational businesses sharing the market of Shanghai include the popular Hong Kong brands, for example, “Esprit, Chow Sang Sang, Chow Tai Fook, and Luk Fook” (Hong Kong Trade Development Council 2014). Considering a great amount of foreign retailers, one can rightfully deduce that the notion of neoliberalism comprises the process of urban restructuring.
The current situation particularity guarantees the prosperity of the tourism industry. In 2013, the city accepted about 230 million of the Chinese (domestic) tourists and nearly 7.57 million of foreign visitors. “By the end of 2005, there were 351 star-rated hotels, including 25 five-stars, and 763 travel agencies in the city” (The tertiary industry n. d.). There are a number of reasons why Shanghai succeeds to attract tourists. Among the most important, one can mention the beautiful subtropical flora and fauna and the proximity to the Pacific Ocean. Besides, the local government creates favorable conditions for trading. Moreover, it is a valuable destination for the current and potential investors. Apart from that, there are other reasons why people consider visiting Shanghai; these causes are revealed below.
Considering the level of foreign investments, it is also necessary to mention the fast growth of the service industry. Firstly, this fact demonstrates that modern Shanghai succumbs to the same shifts in economy as the rest of the world. In particular, together with other developing and developed countries, China moves from the industrial economy to the innovative one. Secondly, the development of the service industry against the background of increasing foreign investment is another vivid evidence of the influence of neoliberalism.
Besides, striving to successfully adopt the principles of innovative economy, China actively develops creative industries, such as design, fashion, and architecture (Hemel & Kuit 2012). To be more precise, in accordance with the statistics, in 2011, Shanghai’s creative industry generated “over RMB 167 billion, accounting for 9.75% of Shanghai’s GDP” (Hemel & Kuit 2012, p. 4). Given the numbers, it is necessary to acknowledge that the city government begins to consider an industry as a leading one when the obtained profit comprises 10% of the general Shanghai’s GDP. Therefore, one can rightfully conclude that, nowadays, creative industry becomes one of the primary industries of the city. Consequently, it is not surprising that Shanghai actively promotes the development of this sector.
Analyzing the value of the subordinate industries, it is necessary to discuss the evolvement of each sector. For example, evaluating the relevance of the contemporary architecture, the foreign investors admit that Shanghai strives to attract as many foreign architecture companies as possible because there is a great demand for their work in this city (Hemel & Kuit 2012, p. 19). Undoubtedly, this approach will lead to certain changes. Firstly, the city architecture will be reconstructed. Secondly, creating favorable conditions for the international workers and investors, the government of Shanghai tends to change the demographic situation. In particular, the contemporary national, ethnic, and racial diversity of population inhabiting the today’s Shanghai will continue to increase. Thirdly, the city will remain attractive for both domestic and foreign visitors, who are the potential source of capital inflow.
Furthermore, observing another important component of creative industry, it is vital to understand that neoliberalism drives consumerism that, in its turn, triggers the development of fashion. Simultaneously, the rapid growth of the fashion sector is defined by the ever-increasing financial well-being of the locals, which was discussed above. The western investors foresee that “the per capita disposable income of urban consumers will experience a 50% increase before 2020 from about USD 4,000 (EUR 3,196) to USD 8,000 (EUR 6,393)” (Hemel & Kuit 2012, p. 23). It is expected that the anticipated enrichment of the Chinese will enable (and even force) them to spend more on clothing, and thus the fashion industry will be extremely profitable in the near future. The theory of fashion states that “once consumers cross the line from being value consumer to mainstream consumer, it is proven that one of the first categories they upgrade their spending on is fashion” (Hemel & Kuit 2012, p. 23). Therefore, it is natural to presume that Shanghai has good chances to become the center of fashion (at least in the Asian world) till the middle of the 21st century.
Unlike the first two components of the Shanghai’s creative industry, design industry is less developed but not less promising. Acknowledging a great potential of this sector, the local government actively supports its development. It means that the life of the Chinese and Shanghai citizens in particular will be shaped by the advancement in the design industry.
Overall, it is necessary to accentuate that there is a strong link between the creative and the service sector: the advancement in the service sector inevitably enhances the demand for the creative industry. In the meantime, the government is aimed at raising “the share of the service sector in the economy to 49% in 2015” (Hemel & Kuit 2012, p. 25). It means that the service industry is expected to reach the half of the general share till the end of this year. Furthermore, the considerable role of the service industry emphasizes the state’s direction towards innovative economy, and the adherence to neoliberalism hastens the development of this process. Given this fact, the expansion of Shanghai through the urbanization of the nearby territory is inevitable. This process is defined by the feasibility of accumulating capital in the suburbs of the city. With respect to this, the Shanghai’s government is supposed to ensure urban accessibility to all citizens (Gleeson 1999, p. 173). The next section will discuss the ways in which this issue is currently being addressed by the local government.
First and foremost, it is necessary to refer to the theoretical aspect of urbanization. Jie Shen, the contemporary scholar, reveals that the urban expansion is defined by the corresponding institutional changes. For instance, suburban growth of Shanghai can be explained through the impact of neoliberalism, which accentuates a change in state political economy. Simply put, the process of urbanization can be described as the approach promoting the use of rural land of the suburbs for non-agricultural purposes. In regard to this, “land and housing reforms are the two pillars for space commodification, which unleash both supply and demand in suburbanization” (Jie Shen, 2011, p.20). Evaluating this process from the viewpoint of the political economy, one can rightfully deduce that “under the system of capitalism, places as a commodity have value in terms of both usage and exchange” (Jie Shen, 2011, p.23). It happens because the accumulation of capital stimulates the peripheral growth through both approaches.
The evidence of the Shanghai’s urban expansion was discussed above by analyzing the recent corresponding statistics. The next paragraph is aimed at displaying the volume of the peripheral development of Shanghai through the observation of the city metro map.
As it is seen, Shanghai metro has ten lines that are stretched more from the north to the south rather than from the east to the west. A great number of stations are the evidence of the Shanghai’s urban growth; however, it also stresses that the city government has elaborated an effective transport system that assures a decent urban accessibility. The subway connects the peripheral areas of Shanghai with its central parts providing fast and comfort transportation to millions of people.
The alternative to the underground is the land transport. In Shanghai, there is a good transport connection, and the roots are skillfully elaborated to enhance urban accessibility. Nevertheless, endeavoring to protect the environment by decreasing the human influence, the government of the city constructs and adopts the regulations that must guarantee “urban transport development toward a more sustainable future” (Pardo n. d., p. 1).
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Moreover, trying to meet the needs of every citizen, Shanghai is famous for construction of the so-called urban parks (Zhai, Dong, Feng & Zhang 2012). These are the specially equipped places to be used by permanently and temporary disabled individuals as well as by the rest of the natives. This approach testifies that the accumulation of capital does not replace the aspirations of the locals to have clean environment and decent urban connection. On the contrary, both government and people comprehend that the responsible use of resources and the humane attitude towards others can facilitate the life of every citizen and enhance the general well-being of all Shanghai citizens.
Summarizing the above-mentioned, it is possible to deduce that the development of Shanghai was stipulated by its geographic location. In particular, the most important geographic characteristic is the proximity of the Pacific Ocean and the excessive accessibility of other water reservoirs, such as the Huangpu River and numerous lakes. Being a port city, Shanghai was doomed to evolve from the coastal village to the huge world-famous megalopolis. This favorable location corresponded with the imperialistic ambitions of other states, which led to the extensive intrusion into political, economic, and cultural life of the Chinese. Specifically, the natives have undergone financial exploitation, national humiliation, and the lack of equity.
Nevertheless, the defeats in the wars, unfair trading treaties with colonizers, and Century of Humiliation led to the enhancement of the Chinese social identity. Besides, the need to revive national awareness begot the Self-Strengthening Movement that helped restore the balance between the Asian world and the agents of the westernization. As a result, the openness towards western technologies hastened the process of industrialization and significantly contributed to the capital inflow.
In the modern world, Shanghai accumulates a lot of capital annually. The adherence to neoliberalism enabled the liberalization of the commercial relations. It turned the city into highly attractive location for domestic and foreign investors, entrepreneurs, and high-skilled employees. To support the further growth of capital, the government of Shanghai adopts the tendency of the peripheral expansion. This approach helps use the city’s suburbs for the further accumulation of capital. Simultaneously, following the process of urban restructuring, the government strives to ensure good urban accessibility for each Shanghai citizen by means of elaborating the sophisticated and eco-friendly transport connection.
This study provides important learning outcomes regarding the processes of urbanization and economic development. To be more precise, it enhances the understanding of the political ideologies, such as imperialism, militarism, and colonization. Besides, this research provides the important insights into the political economy, in particular neoliberalism, and explains how it impacts the native demographics and urban restructuring. Finally, it elucidates what should be done to ensure responsible process of the peripheral growth.
In this regard, the future research may be aimed at detecting what and in which ways the above-discussed objectives affect the individual and social identity of the natives. For instance, it is appropriate to identify how geopolitics influences the cultural attitudes, values, and beliefs of the Shanghai people, and hypothesize how these cultural characteristics may shape their future commercial and industrial goals.
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