Shanghai in the mind of most of the world remains that pre-Revolutionary wonder that was Old Shanghai, and an enduring Western fascination with that entity has spawned a slew of English-language books on the Shanghai of legend. Shanghai as it is -- not as it perhaps was -- has failed, however, to prompt the same sort of enthusiasm. The most recent histories date from the Cultural Revolution era, and no documentation detailing the dizzying development of the last ten years has been made except in obscure economic reports and passingly in guide books.

New Shanghai provides a welcome remedy to this silence, and finally brings Shanghai's representation into the present tense. Written by Pamela Yatsko, Shanghai Bureau Chief for the Far Eastern Economic Review from 1994 to 1998, New Shanghai is scheduled for a December 2000 release by J Wiley & Sons. The book offers detailed analysis of the myriad economic, social, and cultural changes that have rushed through Shanghai since it was declared open to economic reform and international investment in 1990.

New Shanghai is a thoroughly-researched, tightly-written book that is a must-read for any and all China watchers. Shanghai residents will recognize many trends and issues that Yatsko addresses, and will enjoy her answers to countless questions they've always asked. The book is also invaluable for sending home to friends and relatives to explain what this place is really like. The economic slant taken in New Shanghai ensures that it will become required reading for students of the effects of gaige kaifang ("reform and opening") in Mainland China.

Yatsko's central assertion is essentially this: Shanghai was once a great city, and following its opening in 1990, it has been seen by both the rest of China and the rest of the world as a place of great opportunity, both economic and cultural. Yet despite superficial appearances it has thus far failed to live up to expectations on any account, and this failure has been due -- in this order -- to the repressiveness of the local government, the legacy of the Cultural Revolution, problems existing throughout China, and the innate conservatism of the Shanghainese people.

Given the author's background, it is little surprise that the overall thrust of her argument focuses on the economic aspect of things. Chapter 2, "Building the New Shanghai," presents how Shanghai became, for the first time in its existence, relatively moribund in the 1980s as profits from its still leading industry were sucked out to finance liberalization experiments elsewhere in China. By the time Shanghai was opened in 1990, it had already fallen well behind recipients of earlier reform such as Shenzhen and Guangzhou. The first sign of Shanghai's resurgence was the famous early- to mid-'90s building boom, spurred by investment from Hong Kong and Taiwanese property companies, which transformed what had been an architectural anachronism into a forest of cranes and scaffolding. While the city's infrastructure was, and continues to be, greatly improved, the downside was that the boom went bust: Growth rates of some 20% per annum proved impossible to maintain, and office space in Puxi stands at 60% occupancy, dropping to 40% over in Pudong.

The economic analysis takes a different slant in the next chapter, "New York of Asia?" Chinese love to gamble, as the popularity of trading domestic A-shares on the Shanghai Stock Exchange shows. Yatsko documents this craze, as well as the international enthusiasm that developed towards Pudong as the prospective "Asian Wall Street". According to the author, even as the stock market surged ahead, and the more shrewd and daring speculators stood to make out incredibly well, the government snuffed out much of its life and energy out of fear of a crash. The governmental wet blanket is also the dominant theme of Chapter 8, "Made in Shanghai". A Shanghai origin was once a major selling point for brands in China, and Shanghai quality and style maintained their national dominance up into the 1980s. Although the local government pumped financial and other support into industry, the effort proved essentially useless due the stifling of innovation and entrepreneurial spirit, a bias in favor of unwieldy state-owned enterprises at the expense of more promising private companies, and the tendency to appoint cautious, technically inexperienced bureaucrats to head SOEs. The end result is that Shanghai lacks a single nationally (let alone internationally) competitive indigenous name brand, and, with the window of opportunity now essentially closed, the only prospects for success come from foreign brands based in Shanghai.

Foreign investment poured into Shanghai after its 1990 opening, and Chapter 7, "Return of the Foreigners", presents the perils, pitfalls, and prospects encountered by these foreign businesses. That investment in China failed to be the panacea that many expected is stale news, but Yatsko puts on the fresh spin of conditions unique to Shanghai. While places like Shenzhen tended towards a freewheeling, "border town," "cowboy mentality", with rules, tax rates, and pretty much everything else negotiable, Shanghai preferred to follow the law to the letter. This can make conditions more stable, but it can also make it harder to get things done. New Shanghai details a handful of successful and not-so-successful examples, examining issues such as problems with joint ventures, overblown expectations, insufficient entry research, and the high-end goods retail glut.

Readers of a non-economic bent will find Chapter 4 the most interesting of the business and development sections. "The 'Haves' and the 'Have-Nots'" delves into the serious socioeconomic problem of an increasingly wide class divide in Shanghai. On one end sit college-educated English speakers who work their way up through the ranks of foreign companies, generally earning in a month what their parents would make in a year. They buy their own posh apartments, wear designer labels, frequent bars and Western restaurants, and send their pudgy little emperors to pricey private schools. On the other extreme are their elders, who started working in factories under the danwei (work unit) system inherited from the pre-reform days. Paltry salaries were compensated for with a cradle-to-grave welfare system that provided housing, health care, and other essentials. Reform, however, dictated that profitability take precedence over social responsibility, and enterprises that did not fold outright laid off large proportions of their bloated payrolls. Lacking marketable skills and promising prospects, Shanghai's lower class is comprised of the unemployed, living off a few hundred yuan a month from their pensions, and those employed in dead-end jobs, living off only a bit more. The more fortunate find work in restaurants or driving cabs, while others can be seen selling box lunches, operating elevators, and waving little flags at jaywalkers on street corners. And yet even their lot is pretty good compared to the estimated three million undocumented migrant laborers, who scrape by a survival existence in construction, as housekeepers, selling receipts on the black-market, or as beauty shop prostitutes.

Only two chapters are not predominantly economic in scope. Chapter 6 touches on the commonly heard complaint that Shanghai is a "city without a soul." Two well-known cases are presented, with the Shanghai Museum representing a rare case of progress in the "Search for a Soul," and the cancellation of the Kunju Opera performance of Peony Pavilion as indicative of the more common setbacks. The chapter is one of the book's most interesting, but in almost exclusively covering the area of state-funded culture, it leaves a large, gaping whole in terms of Shanghai's independent, lower-profile art and cultural scene. The only passing mention made to this rapidly growing sector is of the more mainstream, headline-grabbing representatives of the supposed "underground", such as ShanghART, homosexual Jazz impresario Coco, and novelist Mianmian.

The innovative reinterpretation of the Ming Dynasty Kunju Opera Peony Pavilion, slated to perform at New York's Lincoln Center Festival in 1999, provided an instance of how the interference of the city's conservative cultural bureau more often than not squelches most potential for cultural progress. Much of the opera had been chopped out by censorship during the Cultural Revolution, including mention of ghosts and cryptically sexual references, and this new production returned to the script much of its rich original subtext. A total of US$500,000 was spent preparing the 55-hour extravaganza, and tickets had already sold out in New York, but at the last minute the Cultural Bureau announced that it would not let the troupe leave and perform because the rendition contained "feudal superstitions, stupidity, and pornography." Peony Pavilion was eventually performed, but with a different cast, and Shanghai's chance for achievement was dashed.

The juiciest, most thorough, and most interesting chapter is hands-down Chapter 5: "Return of the Vices," which could be also be also be titled "Sex and Drugs without the Rock'n'Roll." The chapter provides an intriguing portrayal of the phenomenon of "Canaries" (jinse niao, literally "golden birds") -- young women kept by wealthy, overseas Chinese businessmen. Many of these girls, for reasons of sex and status, use their millionaires' money to support hip young slacker boyfriends, labeled as "Little Wolf Dogs." The chapter also considers the evolving nature of "normal" relationships, including an increasing openness towards sex, dating before marriage, and increasing divorce rates.

Despite a return of drug use and prostitution, Yatsko points out that vice in Shanghai has reached no where near the levels and extent of pre-1949 Shanghai, and, given the efforts of the city government, it probably never well. In many other regards, Yatsko debunks the expectation that Shanghai's resurgence signifies a return of what made Old Shanghai. Old Shanghai, she points out, was an "aberration of history," and conditions that exist today make it impossible to reach the highs of cultural and artistic innovation, entrepreneurial spirit, or political fervor of Old Shanghai, but nor will it descend to the depths of poverty, injustice, drug addition, or wide-scale prostitution that tarnish the city's legacy. The New Shanghai is a place of tremendous potential, hampered by tremendous problems. New Shanghai provides a balanced, insightful, and thorough analysis of these, but whether Shanghai will every live up to its promise, only time will tell.