Shanghai’s Long Road to Prosperity
April 3, 2013
The cover of our latest Shareholder Report features the bustling Nanjing Road in Shanghai, China.
U.S. Global Research Analyst Xian Liang was born and raised in Shanghai and says the road holds special significance to the country as it has more than 170 years of history. Below, our investment team snapped a photo of Xian with his parents, along with my assistant, June Falks, while walking along Nanjing Road back in 2011.
I asked Xian to share a short summary of Nanjing Road’s long history with our readers. Here’s what he told me:
After China lost the First Opium War to the British in 1842, it was forced to sign the Nanjing Treaty with the United Kingdom, mandating the opening of five Chinese ports, including Shanghai, for international trade.
At the time, Shanghai was an ordinary fishing village, but when the area officially started its development in 1843, it grew to become the largest city in the Far East, with Nanjing Road becoming the earliest and busiest commercial street after the birth of modern Shanghai. The treaty opened the floodgates for foreign goods, capital, businesses, banks and concessions. Wealthy Chinese merchants also set up shop here.
By the 1930s, Nanjing Road, although primarily known for its “10 Chinese miles (about 3 miles) of foreign enterprises,” saw even more local businesses flourishing as a result of World Wars, which diverted western attention to China. Its prosperity earned Shanghai the nickname “sleepless city.”
The road has seen its share of devastation as well. The anti-Japanese war (1937-1945), civil war (1945-1949), and hyperinflation (1948-1949) wreaked havoc on Nanjing Road. Then when communists took over China in 1949, ownership transitioned from a capitalist economy to socialism.
During the Cultural Revolution (1966-1976), the city experienced its absolute lowest point, when 90 percent of the longstanding specialty stores were smashed by mobs.
Since then, the area has been restored to its former glory, with a large portion of Nanjing Road revamped for pedestrian traffic only.
Until today, for those who consider themselves “old-school Shanghainese,” Nanjing Road is a symbol of nostalgia. On this street, Shanghai’s first pay phone appeared in 1882; running water introduced in 1883; the first street car in 1908; and the first passenger elevator in 1906. Nanjing Road first exposed the average Chinese to British textiles, French cosmetics, Swiss watches, American appliances, German tools, Swedish enamel, Czech glassware, and Japanese towels.
With 600 stores and 1.7 million people visiting every day, Nanjing Road continues to make history as one of the longest shopping pedestrian streets in the world.