Shanghai in English means “on the sea” or “going to the sea.” It is located at the edge of the Huangpu River. Having emerged as a traditional fishing town in the 11th century, Shanghai grew to become the largest city in China by the 1800s. In the 1920s and early 1930s, Shanghai entered its most prosperous era and flourished as a cosmopolitan and thriving commercial and financial center, which was once called the "Paris of the Orient." However, the boom ended in 1937 when the Japanese bombed Shanghai and later occupied the city until their defeat in 1945. The foreign enclaves were relatively unscathed, but trade and commerce were adversely affected.
In 1949, the Communist Party of China took power. Most foreign firms, along with their financial capital, left Shanghai and the central government took control of the city and the formerly privately-held businesses. During the 1950s Great Leap Forward era and the ensuing Cultural Revolution, thousands of Shanghainese were sent to work in rural areas throughout China; Shanghai's economy suffered as a result. In the late 1970s, Deng Xiaoping declared that China would open to the world. But the economic liberalizations was first launched in China’s southern provinces. Shanghai was sidelined. In the 1990s, Shanghai was chosen by Deng Xiaoping as "the head of the dragon" for modern China's reform and opening up. Since then, the city has significantly contributed to China's economic progress and financial development.
Today, Shanghai’s position is rapidly rising as "a major destination for corporate headquarters, fueling demand for a highly educated and modernized workforce." The Lujiazui district in Shanghai is growing into a sizable financial and commercial hub in the Pudong New Area, across Shanghai’s historical Bund and the Huangpu River. China's State Council said that it aims to build Shanghai into an international financial hub by 2020. For that to happen, Shanghai needs two things from the central government: the full convertibility of the RMB, and the relaxation of controls allowing the free flow of currencies in and out of the country.
Shanghai and Hong Kong : China's emerging global financial hubs by Dan Steinbock in the Globalist. http://www.theglobalist.com/storyid.aspx?StoryId=8312