"Let me tell you the point of the book," interjects Pamela Yatsko, author of New Shanghai: The Rocky Rebirth of China's Legendary City. "The lesson of Shanghai is that heavy government intervention works for some things, but not for others. It works for building elevated highways. It works for cleaning up polluted rivers. It works for successfully holding high-profile events, such as the Fortune conference. It works for building beautiful theaters. It works for streamlining bureaucracy for international companies, to a certain extent, at least. It works for laying off workers in an orderly fashion and keeping them taken care of; not one person I talked to was not getting their 260 RMB unemployment stipend. It works for keeping vice under control, and it works for clamping down on dissent. But it doesn't work for building strong indigenous brands. It doesn't work for encouraging entreprenurship. It doesn't work for nurturing artistic and high-tech innovation and success. And it's the things it doesn't work for that are increasingly important in this era of growing global competition."

New Shanghai is perhaps more about what hasn't worked than what has, but the presentation of both comes across as fairly balanced and straightforward. The duality of Shanghai's incredible prospects and their thus-far disappointing lack of actualization dominates the book, as it dominated a recent hour-long conversation with the author at the Old China Hand Reading Room. She spoke of Shanghai with tremendous fondness, but without the unbridled enthusiasm that characterizes many of the city's chroniclers.

Hailing originally from Bedford, Massachussetts, Pamela Yatsko was among that generation of "New China Hands" who first ventured here in the early, uncertain years of China's reform. Although hailing from a solidly provincial, all-American family, Yatsko explains that she was always fascinated in things international. A 1986 backpacking trip through China first brought her to Shanghai. She fell in love with Shanghai's persisting beauty, the old city's ubiquitous legacy, and its very "Chineseness" shining through all the foreign trappings. After attending graduate school at the John Hopkins Center for Chinese Studies and International Economics and a semester at the Hopkins Nanjing program, Yatsko headed to Hong Kong as managing editor for the Economist Group's Business China. In late 1994, her husband was offered a post in Shanghai at the same time that the Far Eastern Economic Review launched its Shanghai bureau, and they came to Shanghai.

The impetus for New Shanghai grew primarily out of the research that Yatsko did as a reporter. "While working for FEER, I got a deeper perspective of China, and got to see a lot of different pieces of Shanghai. I saw how different trends emerged and repeated throughout these different areas, whether in the economy, culture, or society." Yatsko cites the utter absence of any books on modern Shanghai -- except for dry, unwieldy academic compilations -- as inspiration for her work. She considered it a golden opportunity to be the first person to publish a book on the changes happening in the city. Yatsko considers the previous silence on the topic a natural matter of timing, since one has to live here to understand the trends, and it's the sort of book that only a journalist would have the access necessary to write well. "Old Shanghai's been done, and I'm not the person who could do Old Shanghai well. I'm not a historian."

Yatsko was also prompted by the number of books being written on China's reform process, but all with a heavy Beijing bias; it was time for the Shanghai perspective to be heard. She also wanted to bring the place alive for people, to present a sense of what it feels like to live in Shanghai. She wanted to document Shanghai's re-emergence in a realistic way, free of the exaggerated hype that has surrounded most reports of the city's resurgence. Perhaps the greatest motivation was that, from her reporting experiences, she learned a lot about how Shanghai works, and wanted to inform the world, particularly about how much of the conventional wisdom about Shanghai is just flat wrong.

In explaining the conventional wisdom about Shanghai, Pamela Yatsko offers up her argument against it. "'Shanghai is China's most enterpreneurial place, and it's easy for private enterprise to flourish here.' But actually, SOEs are favored, to the detriment of private enterprise. 'Shanghai is the Silicon Valley of China, full of high-tech firms.' Shanghai in fact has very few high-tech firms, and all the successful ones are based in Shenzhen or Beijing. 'Shanghai has the best companies and the most successful brands in China. Shanghai is a Capitalist Mecca.' In the reform era, indigenous companies in competitive consumer market industries haven't done so well, and 'Made in Shanghai' is no longer a selling point. Shanghai is labeled an artistic center and a politically radical place. It just isn't. Shanghai is viewed through the prism of the 1930s, and the media tends to overblow things. For example, Time magazine's Millennium issue declared Shanghai the next New York, there's a lot of buzz about Shanghai."

The book is aimed at a the niche readerships of people living in or traveling to Shanghai, foreign investors involved in China, people casually interested in Asia, and students of modern China. "It won't be a best seller," concedes the author, "but there is a certain audience." The book's strength, she feels, comes from spanning the multiple topics of a diverse place and bringing them together into a single, understandable theme. Most of the book grew out of research done for FEER, and as a result the book has something of a vignette quality. But while each chapter can be read alone, there is a flow of the narrative and a unity in arguing Yatsko's main point of how the Shanghai government, motivated by blind obedience to its superiors in Beijing.

From the vantage of a "city life" website like ChinaNow.com, the book's main shortcoming came in its chapter on culture -- or lack thereof -- in Shanghai. New Shanghai examines culture in Shanghai entirely through the lens of government-sponsored culture, using the examples of the Shanghai Museum and Peony Pavilion. Yatsko defended her choice of these two as the most interesting stories, while dismissing the "underground" in Shanghai as not extensive or vibrant enough to merit mention. "It's not very cutting edge, and there's much more going on in Beijing."

The depth and breadth of research in Chapter Five, "Return of the Vices," however, more than compensates. "The vices chapter was fun to write," comments Yatsko, and adding that this unflinching examination of prostitution, drug use and other social ills was written independently of FEER.

Pamela Yatsko left Shanghai in 1998 for Hong Kong, but misses the city. "In Shanghai, it's easy to make Chinese friends. It's a funner place to live, with new bars and restaurants always opening, and friends to bump into wherever you go. In Hong Kong, there are more barriers to making Chinese friends, and people are more jaded. Shanghai's a fascinating place to be a reporter, with so much change going on." She cited her few dislikes as pollution, lack of nature, and frustrating interviews with difficult, conservative types. She says she would like to come back some day, but as her husband works in finance, and opportunities for him in Shanghai are few, it doesn't look promising at this point.

Her final verdict on Shanghai was cautious. "More than anything, it needs reform. WTO is a great thing for Shanghai. The more China frees up, the better for Shanghai. The more hands-off, the better. Shanghai can't call its own shots, so there's a ton of potential still unrealized." At an earlier point, I had inquired about the book's rather odd cover, which features a man clad in standard Beijing winter garb (never seen in Shanghai) painting in bold, ominous letters "New Shanghai" over a faded red image of the Bund. At first she muttered, "It was the publisher's idea," and then she paused, and added, "but when you think about the more subtle meaning, of a Beijinger painting the New Shanghai over the old, it's very apropos."