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3

The City Without a Past

The tiny patch of brilliant green – it looked tinier, somewhat shrunken from when I had seen it last, five years before – lay half hidden behind a grove of London plane trees. There were shrubberies, a croquet lawn, the tattered leavings of a tennis net, a rusty roller with a dried-out wooden handle. The sharp scent of boxwood, of damp moss, of old pinecones. At the centre of the gardens a squat country house with a copper roof, dormer windows and ten Doric columns on the second floor. In places – the shadow of an old brass plate, the outline of iron letters on a garden gate – relics of what they called the place half a century ago: Hazelwood.

I had always liked the house. As a creation of the mid-thirties, it reeked of solid Home Counties suburbia, Betjeman country, although its creator insisted it was art deco and had it done up in canary yellow. It had been built as the residence of the taipan of Swires – or Butterfield & Swire, as it was known more precisely – the great British business house that along with its rival Jardine, Matheson & Co. once dominated trading in and around China. Swires ran China Navigation (CN Co.), one of the greatest shipping lines that worked the Yangtze. The grand men who were chosen to manage the firm for four- or five-year stints in Shanghai were immensely well looked after, treated like diplomats, or like the suzerains that in this peculiar hothouse of a city they invariably turned out to be. This house was part of the package.

I liked the house in part because of what it represented – mercantile confidence, colonial swagger, a certain rigorous high-mindedness – and in part because of who designed the building: Clough Williams-Ellis, one of Britain's more eccentric architects, and a man I had known a little. In the remote corner of north Wales where he lived, he cut a striking figure, not least by wearing plus-fours with canary-yellow socks and a cravat. His wife was a Strachey – his own bohemian air may have been half derived from his association with Bloomsbury – and he helped edit her anthologies of science fiction.

Architecture was his love, and eternal warfare against those he called ‘the Philistines' his self-appointed mission. With a view to creating beauty wherever he might, he designed buildings in almost every corner of the world. The quarry workers' tenement he inherited was turned into a house of fantasy and delight. He created an entire village near his home – and so fantastic did it turn out that it was later to become world-famous as the set for a cult television show.* He designed a baroque chapel in Hertfordshire and a Tudor castle on the Wye. He rebuilt the centre of one of Ireland's prettiest towns. He designed Lloyd George's tomb. And he designed – though he never visited – two properties for Swires in China: the taipan's house in the port city of Tientsin and this house in Shanghai, Hazelwood. What he would have thought of the old place now, sitting in the midst of so much modern philistinism – for modern Shanghai is nothing if not a philistine metropolis – is not hard to imagine.

Whenever I found myself in these parts I would always come and pay homage to the house and through it, to old Clough: I thought of the place rather as a friend, a place I could hold on to, or as somewhere that, in this most crowded and jostling of cities, I could get my bearings.

Once it was a home, comfortable, well set, with four tennis courts and a raked gravel drive. It was much the same kind of house as you might have visited for a Saturday lunchtime gin in genteel suburbs like Camberley or Virginia Water, or perhaps White Plains or Grosse Point – except that this was Shanghai, the most iniquitous town in the world, a cruel, mercenary city of white-hot passions and ice-cold hearts.

Not that those who lived at Hazelwood seemed party to any obvious iniquity, nor any cruelty or passion. You could remember what they looked like: the Swires men invariably tall, with square jaws, neat moustaches, kitted out in yellow cardigans and cavalry twill; the women matronly, competent, handsome, with the deep voices of the hockey field. (The first resident was the redoubtably square-jawed N. S. Brown, known to his staff, less than kindly, as Night Soil Brown.)

You could remember the innocent sounds, as well: the crunch of gravel as tyres pulled in under the porte-cochere, a sudden burst of laughter from the grass court, the patient clicking of the pruning shears by the matron with the trug of roses, the music drifting lazily from a wireless in the drawing room. The Chinese amah calling to the children to come inside for tea.

But these days what once was Hazelwood is just a small hotel, the Xinguo Bingguan, the Prosperous Kingdom Guest House. It was confiscated from Swires in the 1950s, like almost all the assets and property of the city's foreigners. Nowadays there is a glossy brochure: ‘Inside the Xing Guo Hotel the scenery is beautiful and peaceful. Big trees with exuberant foliage are alive with melodious birds. Fragrant wafts of flowers in full blossom breeze about. Several villas in European style are enwrapped by the greenery…’

What was once the main bedroom of the house, the one where the taipan slept and which had the french windows leading onto the terrace, and a view over the south lawn, has now been made into what they call a suite. The proprietors – the local government, a city ward in fact – will take sixty-five American dollars for each night you stay there, and they will charge it to your credit card. You are assured of privacy, just as the lairds of Hazelwood once were: the house is quite invisible behind the high brick walls that insulate it from the people and the traffic on Avenue Haig and Avenue Joffre and Rue Cardinal Mercier, and Bubbling Well Road, as the streets around were then known.

It was indeed made to be quite hidden from all of the city, amid which it nestled, secretly. It had been designed as a private house for one of Shanghai's most powerful foreign figures, a man who wanted a place tucked away from the bustle and the sin, a place where you could forget the existence of the city's 668 brothels and the calls for drinks at the longest bar in the world and the assorted terrors of Blood Alley – and for all the time he lived there, and for decades afterward, Hazelwood was private indeed.

But things have lately changed in Shanghai, and Hazelwood's splendid seclusion has gone. The privet hedges and the plane trees may still be there. But now, from another angle, an entirely new one, the house has recently become eminently and rather dramatically visible. A great new building has just gone up, one that dominates the city skyline and provides a place from which to gaze down on this and on all the old jumble of structures from Shanghai's extraordinary past.

It is impossible to miss: I saw it the very instant that I drew back the curtains of my cabin, and I almost jumped with surprise. The boat on which I was staying was moored at the northern end of the city reach, just downstream of the old Russian Consulate, at the place where the Whangpoo makes the final turn of the S-bend that once dictated where Shanghai was first built. My cabin faced south, and so the view was impeccable – directly down the river. The huge walls of old Imperial Shanghai ran down the Bund to the right. The suspension wires of the new Yangpu bridge – the second of two – glinted ahead in the distance. But on the left, bathed in white searchlight glare and winking with dozens of anti-collision lights, rose the extraordinary, unexpected, bright-red-tinted and breathtakingly ugly Oriental Pearl Television Tower, the tallest and, for the time being, unarguably the most vulgar structure in the East.

The Oriental Pearl Tower is a mongrel of a thing, a high-technology fantasy by an architect who was commissioned merely to build something that was defiantly and symbolically Twenty-first Century. It stands, perhaps with deliberately revisionist cheek, on top of the very spot where Jardines once had their main Pudong wharves and warehouses. It is 1535 feet high, all legs and bulbs and pods and needles; it looks like an insect. It is not unimpressive: those who see it for the first time gasp, for it quite dwarfs every other building in Shanghai by both its scale and its bellowing chutzpah.

At night it looks as though it is about to take off. (‘I wish it would,’ muttered Lily, who at first thought it a very disagreeable addition to the city's skyline.) By day it stands suspended above the hurrying crowds, looking dark and vaguely menacing, half lighthouse, half gibbet. It is of course suggestive of tomorrow, but at the same time it somehow seems to be a warning of tomorrow. Some people who see it shudder: it is so huge, it went up so quickly* and on close inspection it is so badly made. And indeed, by being so gigantic, so hurriedly done and so shoddily put together it does manage to symbolize – in more ways than its makers know – the realities of the fast-growing new city that sprawls around and beneath it. But that is not why I found it so menacing a structure: I think it was the fact that it combined its sheer ugliness with its utter domination of the view. How, I kept wondering to myself, could city fathers with any sense of civic pride have permitted such a thing?

A deliriously proud citizen named Mr Su took me to the top of the monster. According to his thickly laminated business card, he was its Vice General Manager, and I gathered from his ceaseless chatter that his task was for him a labour of love – he adored both his building and all of new Shanghai. As we stepped from the lift, he spread wide his arms and began to point out grand and new and ever more glittering structures that were rising around the city on every side, down amid a forest of construction cranes. For a while I happily ignored him: I was content to peer down through the grey-blue haze of factory smoke and car exhausts until I found the tiny landmark patch of green that was Hazelwood, far away to the west. I spent some while gazing fondly down and across at it, getting my bearings in a way I had never imagined possible. It was infinitely more pleasurable to do this, to shut out Mr Su's unending drumbeat of statistics and notable achievements and, in a poignant sort of way, to savour the connection and reflect on the dissonance between Clough's old house down there and this new colossus on top of which we were standing.

But eventually Mr Su became less easy to ignore. He moved away from the windows, invited me into another lift, took us up a few floors, then down a few more, along a corridor and onto an escalator until I was quite comprehensively disorientated. He had by now stopped talking of the changes that were being wrought down in the city, bubbling away instead with explanations of the specific architectural details of his own building. He did so at a great clip, shouting all the while, like a circus barker.

‘The symbol of this city is – what? The pearl. Pearl of the Orient, yes? Well, look at this: how many pearls you see?’

We seemed to be standing now near one of the tower's three elephantine legs, and I saw he was waving pictures before me, jabbing at each of them with his finger.

‘Look at Seattle. Only one pearl at the top. Look at Moscow. Look at Toronto – bigger than us, yes – but how many pearls? One, just one.

‘Now look up, look at ours.’

And I looked, and halfway up the closest leg was a thirty-foot sphere of red glass, like a thrombosis.

‘Er – a pearl?’ I ventured, hesitantly.

‘Yes – exactly.’ He looked amazed at my insight. ‘And look – there's another, and another.’

One pearl, so-called, on each of the three legs. One immense sphere – another pearl, I should say – where the three legs joined. Then five more smaller globule-pearls, each sixty feet in diameter, up along the main shaft. Another truly massive one at the top of this shaft, then a smaller one farther up on a subsidiary and narrower shaft, after which was the spire and on top of this the television antennae.

‘Eleven pearls. Eleven! How's that for a symbol? We wanted to be different, and we wanted to make a statement about who we are. So we truly are the Pearl of the Orient now, don't you think?’

Lily was stifling her laughter at all of this – though I rather sensed she was changing her mind about the tower now that we had taken this tour; she had nudged me at one point and said that the building was making her feel ‘quite proud’ – but there was no stopping Mr Su. ‘Come into the elevator. We go to the topmost pearl. The most private room in Shanghai. Here you will get away from everything. You want to hold a secret meeting, you hold it here, in full view of everyone – but no one can get here. You understand?’

Men in red uniforms stood as lift doors opened and shut, girls in red uniforms took their positions on red carpets inside the lifts, red light filtered in through the red glass. (‘Canadian, imported specially. Far too expensive. The old buildings here only ever had blue glass, or clear glass, so we are much better, yes?’) There was a fiery anger to the inside of the tower, a furnace feeling that was not much relieved when finally we arrived inside the sphere – the pearl – at the top of Shanghai. The place was still plastery with makings, workers scurrying around hammering and drilling and tightening things, and there was sawdust on the red carpet. The light that filtered in was tinted rose.

‘One thousand three hundred of your feet up in the air,’ announced Mr Su happily. ‘Still not quite the top, but this is as far as guests can go. Here we will have conferences, honeymoons. Who knows?’ He giggled amiably. ‘Very private.’

As private as Hazelwood once had been, I thought. There it stood, five miles away across the hazy plain of mud over which the early Shanghai had been settled. Five miles separated us, and sixty or seventy years – which was just about all the real history that Shanghai ever had.

Technically the city actually is quite old: there are suggestions that a fishing village existed on the site in 200 BC, and it was given its present name – which means simply ‘above the sea’ – in AD 900. But it never amounted to much, and compared with its neighbour cities – places like the then-called Soochow and Hangchow and Ningpo – it was generally ignored. It had a modest wall, three miles around, built more to protect the inhabitants from Japanese pirates than to give itself airs. The wall was unusual in that it was round – most Chinese walled cities are square – and its outline, surrounding what was once called the Chinese City, or the Native City, is still plainly visible on maps.

At ground level, the wall is less easy to spot: the curving road can just be made out, and beyond it the streets are narrower and grubbier. The laundry hung out to dry from one house touches the clothes poles suspended from the house opposite. There are rats everywhere, despite posters advertising incentives – cash, rice, cheap radios – for carcasses handed in to the local street committee chairman. Tiny stalls sell joss sticks and spices and plastic shoes, and there are more open-air restaurants – a dignified term to describe a scurvy-looking man presiding over a wok filled with dark and ominously bubbling and hissing fat – than elsewhere in the city. Generally, though, the relict part of Shanghai's old quarter is dull and charmless, with an unhealthy feeling, and when I suggested to Lily that we might linger there and perhaps take dinner, she made a face and refused point-blank.

The city's real history – the history that has made her so notorious a place – began at the end of the eighteenth century: this was when the East India Company, spurred on by the reports of missionaries who had seen it, began to take an earnest mercantile interest. What the company officers in Calcutta liked about Shanghai – what was then, as now, the city's crucial advantage – was her prime location.

Shanghai was no isolated trading port like Canton or Macau, merely suspended on the underbelly of China, cut off from the vastness of the Empire by ranges of hills and linked to it only by moody and irritatingly short rivers. Shanghai, rather, was at the downstream end of the Yangtze, a river that, though then quite unexplored by foreigners, clearly penetrated deep into the heartland of the nation.

The distinction is an important one, and it has implications today for the future of, among other places, Hong Kong. All of the southern entrepôts, of which Hong Kong is the best-known, are in truth little more than gateways to the south of China. Circumstance has forced them to become gateways to all of China. But a glance at any map will show they are not really gateways to China at all – they are simply gateways to south China. For eighteenth- and nineteenth-century merchants eager to win permission to trade with the vast Chinese Empire, any gateway was good enough – even entryways as limited in access as the southern port cities.

Shanghai, however, is linked intimately with the entire country: no hills, no barrier of any kind, separates the port from the interior. A journey from Tibet to Shanghai is merely long: it is not, as the Yangtze herself so perfectly illustrates, impossible. And so, both when the East India ships first recognized that fact and today (and in the future), this city on the Yangtze is an entrance and an exitway for all of China. (This is a reality that was recognized too late, one might argue, in the haphazard process by which Britain settled her colonies in the East. How might matters have turned out if Shanghai had been the colony, not Hong Kong?)

The crews of the East Indiamen who visited the Shanghai of the beginning of the nineteenth century had only to glance at the cargoes in the Yangtze junks moored out in the roadsteads to know that this modest city should, one day, be the principal port for all of China. The bills of lading preserved today speak of bolts of silk, bags of green and black tea, sacks of bean cake, tobacco, camel wool, porcelain, noodles, liquid indigo, musk, rhubarb, lily flowers, nutgalls, fans, ginseng, mulberry paper, bamboo shoots, books, the hides of strange and exotic beasts, cuttlefish, straw hats, rice, varnish, dried fish, tung oil, sunflower – all China – settled in the junks' holds. So in 1830 the company plucked up the courage to send in a ship, the Lord Amherst, to ask the local taotai for permission to trade: they were sent away with orders never to be so impertinent again.

But all had changed a decade later. Under the combined malignities of Patna opium and Lord Armstrong's heavy guns – a story that belongs to a later chapter, as it culminated in solemn ceremonies held farther up the river – China caved in to the West's demands and conceded that the foreign devils could indeed have permission to trade – not only in Shanghai, but in the other four so-called treaty ports of Canton, Amoy, Foochow and Ningpo as well. From 1843 onward they could trade and, moreover, their traders could live in these same five cities and could enjoy the extraordinary privilege known as extraterritoriality, as if they were diplomats in an embassy, or crewmen aboard a ship on the high seas.

So within the British fiefdom that was to grow up beneath the British flag beside the Soochow Creek, British policemen (actually Sikhs, recruited in and imported from the Punjab) enforced British law.* Within the French Concession, which lounged defiant and insular to its south, policemen from Vietnam did much the same. Such Chinese authority as prevailed in the rest of Shanghai – in the native quarter, for instance – was to these mercantile Europeans an exotic irrelevance. The newcomers were men beyond the reach of local law, and beyond the constraining reach of the mores of their home lands. Bad behaviour, unsupervised by home, could henceforth begin.

And, whether justified or not, it is bad behaviour for which Shanghai is still best known. On the mudflats that stretched between where the Oriental Pearl Tower now stands and where Hazelwood still languishes were all the worst imaginings of a West unleashed, a concentrated essence of wantonness that made Shanghai one of the most memorably sinful cities in creation, a place that – so faded memory and modern journalism have it – may have been founded on godowns but was irretrievably grounded in Gomorrah.

For a few dozen copper cash you could have a nine-year-old child of either sex perform any act you wished. Brothels the size of factories operated with total impunity. Opium divans were as common as teahouses. You are drunk on absinthe, and you run over a Chinese coolie in the street? Four hundred dollars paid to his friend, or to his mother, and the problem evaporated. Trouble with one of the locals – perhaps he was impertinent, or your servants didn't care for him? A trifling sum paid in Mexican eagle-headed dollars would secure the services of a man with a meat cleaver who would slice through the tendons of the offender's shoulder, so he would never again be able to lift a box or a sack, or even his arm.

Shanghai was, if you believed its reputation, a dreadful place. Yes, most people – or at least the foreigners, and the rich Chinese who had evolved from the class of men called compradors, the businessmen's go-betweens – enjoyed themselves, or believed they did. This was a city where one could dance all night, go riding (on especially small Mongolian ponies, which raced vigorously at the track) at dawn, work all day and begin a new round of parties that evening without ever feeling weary. ‘I used to gamble, gamble, gamble oh, till five o'clock in the morning,’ noted one Shanghailander, a middle-aged gentlewoman transplanted from the innocence of Sussex. ‘Then I would go home, have a bath, get into jodhpurs, go down to the race-course, ride my ponies…’

During the twenties and the thirties, Shanghai's salad days, there were the delights provided by the caravans of White Russian girls who had been evicted from their homeland by the Bolsheviks, and proved the finest and most accommodating of whores, pandering agnostically to the needs of either Devils or Celestials, while operating under the guise of what were peculiarly Shanghainese professions – artiste, entraîneuse, taxi dancer. (The less attractive, or less young, took to walking hopefully beneath the plane trees of Avenue Joffre.) Teenage boys would seduce their parents' Chinese maids, knowing no complaint was possible, nor would ever be entertained. Auden and Isherwood took a close look at gay Shanghai and found much to their liking – amid a Chinese community for which, as Lily would constantly remind me when we talked of such louche happenings, homosexuality was then (as now in most of China) regarded as an illness for which treatment was possible, and which was confined, it was firmly believed, almost wholly to men of the decadent West.

More workaday needs were catered for as well. Your parrot's toenails growing too long, or your fox terrier's coat too bushy? The Shanghai Pet Store at the corner of Dixwell and Bubbling Well Roads would oblige. Handmade silk directoire knickers? Consult Messrs Ying Tai on Yates Road, or any of the other lingerie shops on what the locals called Petticoat Lane. The Kiddy Shop for your child's dungarees, Godfrey & Company for decent beef, Miss Maisie at La Donna Bella could do marvellous things with one's hair, and Madame Soloha's clairvoyance service often proved effective, though rarely for placing bets on the horses.

In the concessions where the foreigners lived there were four dairies, two dog hospitals, three expert masseuses, two furriers, a saddler. Whiteway & Laidlaw was the big department store, better regarded than the Sincere Company or Wing On. Kelly and Walsh supplied books and copies of the latest English and American magazines. And there was always Ramsey & Company on Nanking Road, who could supply you with enough gin to float a battleship, and a pretty decent claret for when one of your tennis partners from Frenchtown brought her husband round to dinner: moreover, it would all be delivered, and given to you on tick.

I once came across a small dictionary of pidgin, which offered something of the tone of the place. The pidgin itself (the word is said to be a corruption of ‘business’, so the excuse is that this is the Oriental version of business English) sounds from this distance like a cruel joke, with its no b'long ploppers (this is not right) and my catchee chows (I'm going to eat) and pay my look-sees (let me look at it). But it is in the English equivalents, as laid out in the dictionary, that one can more properly hear the attitude of the times. ‘Never mind,’ reads the book, irritably. ‘Tell him. I don't want that. Let me look at it. Upstairs! I don't want. Get me a ricksha. Fetch quickly. Give Master the letter. Tell him to come in the morning. Get the coolie. Give me two. No overcharging! Is the bargain settled? That will do.’

It would certainly not do in Shanghai if you didn't belong to a club. A club was a vital institution for the expatriate world, and in Shanghai the clubs, like most in the East, were made to appear grander than they actually were by their rigidly exclusionary policies – no vulgar salesmen, no shopkeepers, only the grandest of men who had associations with trade, and no one with the vaguest hint of Asian blood. Behind their grand facades, however, was bland normality: the taipans and the griffins (the fresh-faced newcomers to the East) merely drank, played cards or billiards, slept, nattered, or read. The Shanghai Club, with its famous 47-yard-long bar, was on the Bund, and still stands; so was the Concordia for Germans, and the Masonic. There were the grand and agreeably social sporting clubs – the Rowing Club, the Midge Sailing Club, the Cricket Club. As soon as Britain's first consul, George Balfour, had officially opened his mission in 1843, he set about overseeing the building of the most important sporting body of all, the Race Club. It was built beside a huge track that after 1949 was deemed large enough a space to be converted to Shanghai People's Park, and of which a part has in more recent years been made into the city's monumental new People's Square.

Everything in Shanghai in those days – the only days people talked about, until very recently – took place at a run: there was no time for languid contemplation in a city where everyone needed to make money in fistfuls, where no one trusted anyone else, where it was always feared that the next deal would go to the next man if you did not attend to your business. Rich men had two bodyguards – one Chinese, the other Russian – and each would watch the other for signs of disloyalty. There was a rigid hierarchy of distaste, as well: the English merchants looked down on everyone, the Indians and the Eurasians were despised by the English and the Chinese; the Sikhs were despised by the Parsi businessmen; the coolies were despised by the Sikhs. ‘Chop, chop!’ you'd scream at the ricksha boy, and you'd clip him round the ears if he didn't go fast enough.

And all the while, below the glitter and the meretricious glamour of the place, so its rottenness seethed and grew. The poor would come to beg on Nanking Road and be shooed away by the guards. The ricksha boys had the thinnest shoulders you'd ever seen – you knew they were hungry and would live for thirty years at best. Lorries would growl around the International Settlement on chilly winter mornings, taking away the bodies of those who had died of starvation and cold during the night. A banker might be so rich that he. would (like one Joseph Hsia, who later moved to Hong Kong) have a gold smelter in his back garden: but outside his front door there would invariably be a gaunt Chinese, dressed in rags, shivering and hungry. Some of the rich were kindly; most, in this ice-cold metropolis, were anything but.

And yet what made Shanghai so appealing to the foreigners who first settled there was an attitude among the local people that might well have prompted gentler sentiments than these. For unlike in the rest of China, where the barbarian foreigners were regarded by the Chinese with a deep and abiding contempt – after all, the inherent superiority of the Chinese was, and still remains, central to the national psyche – early settlers in Shanghai wrote of their distinct impression that they were, well, almost liked.

Few foreigners would go so far as to say the Shanghai Chinese admired or respected them – there was a general acceptance that a people with five thousand years of uninterrupted civilization behind them had some right to hauteur. One might not agree with it, one might try to ignore, skulking behind one's own mock-superior airs – the club's exclusionary policies, frequent reminders of who had won the Opium Wars, or of who had sacked the Summer Palace up in Beijing. But it was always there, and it would be a wise expatriate who would try not to fight it.

Yet in Shanghai there seemed less need to fight. It was always thought that here the subterranean hostility had abated somewhat, that the Shanghainese ‘were little afflicted’, as one writer put it, ‘with that peculiarly passionate hatred of the pale-eyed and fair-haired beings which was so widespread among the Cantonese.’ They seemed more open-minded here, more willing to adapt to foreign ways, more tolerant of the devils from across the water. The Shanghainese learned, happily and willingly, and masking their disdain, from the foreigners. And within this distinction lies the root, undoubtedly, of the future success of the city. Her location on the Yangtze is her greatest boon; her people, unique in all China (and speaking the ugliest of languages, a discordant mélange of Mandarin and Cantonese spoken by no one outside the Yangtze delta), are her greatest asset.

For while sin is at the core of Shanghai's reputation, the more sober reality – what allowed the city to survive and to prosper, and what made it less of a Gomorrah than it seems – was its unashamed and freebooting mercantilism. This was a city in which the trader was absolute king, a city (perhaps the last in the world) that was created by and for and utterly dominated by the demands of the merchant. Shanghai was a place so dedicated in its commitment to commerce that Hong Kong seemed by comparison a dreamy city of poets and philosophers. Shanghai was a place founded in the traditions of Genoa and Venice. It was guided by the same kind of aggressive self-interest that was invented by the Germans of the Hanseatic League – with the Rhenish traders of fourteenth-century North Europe replaced by the Britons and the Frenchmen and the Americans who came to China in the nineteenth. True, the merchant of Shanghai played, and he played hard and fast and loose, and there are those who will say he became unshackled from his moral guide-wires in doing so: that is one side of Shanghai's story, and the more titillating one for today's palates. But he also worked, and traded, conducting business on a breathtaking scale: the legacy of that side of the city is what remains. And this is what a place like Hazelwood stood for, or stands for today: the memory of sin on the city's surface, but the reality of sturdily respectable – or at least sturdily profitable – commerce underneath.

I walked down what used to be Avenue Joffre one spring evening to see something of that legacy at work. I was coming back from taking a stroll around what is left of Hazelwood's lawns, and I headed east, towards the winking towers on the Whangpoo. The avenue is now Huaihai Road, and though its name gives it stout revolutionary credentials,* and though for many years it was as dull and grey as ditchwater, it is now one of the liveliest of streets in any city, a Chinese version of the Ginza.

Coloured lights were strung in arches along its length. Small dress shops, tiny Japanese restaurants, sports cars parked outside nightclubs with their ubiquitous neon lure, the flickering Kara-O K signs, smart-looking cafés with names like Los Angeles and the wrongly spelled Cordon Blue. The street was choked with people – mostly young, nearly all Chinese: the Europeans stay on the six-mile strip of Nanjing Road, a few blocks north, where the prices are higher, the shops are open later and there is a McDonald's. Huaihai Road is by contrast a purely Chinese affair: the shops, the bars, the discos all Chinese-owned, the customers all from the suburbs and the tiny city streets called hutongs and the tower blocks of flats near by.

As we were passing one particularly glossy-looking bar, Lily suddenly beckoned to me: three girls were sitting together at a window table, each nursing a can of Coca-Cola. One girl was talking on a mobile telephone; there were three pagers on the table, each beside a pack of Marlboros.

‘Prostitutes!’ said Lily. ‘Can tell them a mile off.’

We sat down with them. None of the three spoke English, nor had any of them ever had a western client. The girl with the phone said her name was Xiao-an – Little Serenity – and she charged four hundred renminbi for an hour with a man. Did the police bother her? ‘They are often our best customers,’ she said, and the three exploded in laughter. She was not a Shanghainese – she had come down from the far north, after hearing how good the money could be. She thought she would stay in Shanghai a year, and then go back home to Harbin in Manchuria and set up a karaoke club of her own. ‘This is a good life,’ she said. ‘Shanghai must be like your New York, I think.’

Outside the window I could see two policemen, who must have been only too aware of what was going on. Indeed there were a lot of police in Shanghai: at every crossing one stood on a plinth, directing traffic.

I spoke to one of them: he was unarmed (although Lily kept insisting that all Chinese policemen did keep side arms under their shirts), but he did have a radio, and he would be able to get brother officers within thirty seconds if any motorist broke the law. Shanghai seemed to me one of the most aggressively policed of Chinese cities. Maybe it has to be: maybe the old habits of lawlessness – this was a gangland city, after all – have not yet died. Something of the sin remains.

And older citizens are brought in to help regulate matters too: old men with tattered red and green flags stand at every intersection to make sure people don't jaywalk, and that cyclists don't ride against red lights. Equally venerable men and women are employed by shops to advise innocents on how best to get onto an escalator, or how to find their way among the maze of stalls and corridors. ‘There was no unemployment in Shanghai under the old-style Communists,’ one old man remarked to me. ‘And there isn't any now, under the new ones. Everyone here works. Everyone here makes money, everyone makes his contribution to seeing that the city keeps going.’*

This ancient directed me around a corner, to Joyful Undertaking Street (where I tried to explain to an uncomprehending Lily why a joyful undertaker would be hard to find) and the old pink building where the Communists first met in July 1921. It used to be a girls' school: now a museum, a shrine for the Shanghai faithful. Pictures of a young-looking Mao were on the wall, ranged beside those of the other twelve delegates at that first gathering. But I noticed that of this group, eight are dignified with full-page pictures in the brochure on sale in the foyer for a couple of renminbi. The others – an augury of things to come – have small and out-of-focus snapshots, and explanations in the rubric that they either had left or had been expelled from the Party, or, horribile dictu, had gone over to the Japanese.

We wandered idly through the school halls, looking at various icons of Imperial cruelty. A ticket that gave a worker in a capitalist tram-factory permission to spend only two minutes in the bathroom particularly exercised Lily – it made her so angry, in fact, that she immediately developed a spectacular nosebleed and had to be looked after by the crone who ran the place. The woman kept soothing Lily by saying how her red blood was a symbol of her socialist purity – she looked witheringly up at me while she delivered this homily – and demanded that Lily sign the visitors' book in blood. ‘It is a symbol,’ she kept saying. ‘A sign. I am very proud to know you.’ Lily, as perplexed as most modern young Chinese about the realities of Marxist-Leninism, made an excuse, signed the book in ink, and we hurried back out into the lights of Huaihai Road.

There, under one spreading tree a number of elderly ladies had set up ear-cleaning stalls. Nearby, younger masseuses offered to twist and pummel the tip of one of your fingers, promising thereby to make you feel younger and more active for the night ahead. Beside them was a man selling crickets' cages, and another offering steaming buns, ten jiao each. This was China still, no matter the neon, the mobile phones and bleepers, and no matter the distinctive rumble I could hear beneath them – a Manhattan-like rumble – of the brand-new subway trains rolling their passengers home.

The subways – one line is now ready, six more are to be opened before the end of the century – are already changing the lives of the millions who live here. One example came home to me especially vividly. A few years before I had been making a film in which I examined in some detail the life of a young Hong Kong bank worker, and of his opposite number in Shanghai. It was, back in 1988, a brutal comparison.

The Hong Kong man spoke English, had a huge flat, drove a two-year-old Toyota, worked in a vast air-conditioned skyscraper, took annual holidays in Thailand and California. His Shanghai counterpart, Ge Guo-hong, was a clever, rather intense young man who did exactly the same work for the same bank, but in a cramped and ancient office that stood not far from where I was now walking. He told me, rather sullenly, that he spent three hours in a dirty bus each day travelling to and from work, standing – never sitting; he could never find an empty seat – in the hot and muggy air. He lived in a tiny one-room flat five floors up – no lift, of course – and his wife worked in a factory: their combined earnings were such that neither had ever had a holiday. His life, he said, was not good.

I looked for him on this new journey, but in vain. I found where his old flat had been, but it had been demolished, and a hotel was being built on the site by a South Korean company. A shopkeeper who had appeared in the film remembered him, though rather vaguely. The last definite news was from two years before, when he heard that Ge's wife was living with relations across the river in Pudong, and had for a while worked as a waitress in the French-owned Sofitel on Nanjing Road, where she had been trying to learn how to speak French in the process. Had Mr Ge still worked at the bank, I reflected, and had he still lived in his old district, he would now be able to travel to his office in one of the new air-conditioned subway trains, and his journey – a trip that beforehand would have taken him ninety miserable minutes each way – would take him only nine minutes, and would cost no more.

His old office block had been knocked down six months before, and the bank is now housed on the tenth and eleventh floor of a skyscraper overlooking the Whangpoo, a building that is every bit as glittering as its parent in Hong Kong. When I went there and asked for Mr Ge, an ancient Chinese man operating an abacus at the back of the room, and who spoke impeccable English, said the name to himself over and over again. ‘Ge Guo-hong. Ge Guo-hong.’ He then turned to me and, in the rueful tones of an Oxford lodge porter, said: ‘Sorry, old man – the name doesn't ring a bell with me.’.

But then I found one of his friends, a man who worked in the bank's computer department. It turned out that Mr Ge was away from Shanghai and had been for ‘some years’. He was on special leave, studying at a university in Philadelphia. He was getting a doctorate and a command of English, and quite possibly a green card. There was more to it than that. The friend explained:

‘It was all to do with the film. You made it? You may not realize, but you changed his life in a very big way. Mr Ge was ashamed by what he saw when you compared his life with that Mr Wong, or whatever his name was. He became determined to do better than the man in Hong Kong. We all saw the film. The office people sent a copy up from Hong Kong – we looked at the tape time after time. We all felt the same way: we thought it was quite wrong that the Hong Kong people, who are not in any way as clever as we are, should do better than us.

‘So he has gone, sort of as our ambassador. He will come back, and he will be a great success. We will show those southern people how poor they really are!’

I asked the young man what he thought of the new Shanghai, symbolized by the Pearl Tower he could see from his window.

‘I like the new Shanghai,’ he said. ‘But that thing? I try not to look at it. It's not the kind of symbol I want to see. I am very proud of this city. But that – that looks, how to say it in English? somewhat vulgar.’ ‘Tacky!’ chimed in another man, who said he had been to San Francisco, and who knew American slang. ‘Yes, that's it – tacky.’

The bank's office is at the southern end of a half-mile stretch of castellated Imperial architecture that offers the world the best-known face of Shanghai. We have to thank a prescient taotai for its existence, however, and not the foreigners who built it. When the first settlements were being delineated – the Americans to the north of Suzhou creek, the British in twenty-three muddy acres to its south – the Chinese laid down a rule: to preserve the rights of coolies who used the towpath to track their grain boats up the Whangpoo and towards the Yangtze, no foreign building would be allowed within thirty feet of the river itself. So a line of stakes was driven in at the water's edge, and a wide road was created between the river and the new city. This was an esplanade to which the British gave the Persian name: the Bund.

The scale of the walkway was titanic. It was more like a seafront than a riverfront: a stretch of open land positively demanding that a slew of imposing buildings be built to march along its length. The great consulates and clubs and commercial houses all competed to oblige: the Hongkong & Shanghai Bank, the Yokohama Specie Bank, Jardines, the Shanghai Club, the British Consulate, the Chartered Bank, Butterfield & Swire, Victor Sassoon's Cathay Hotel, and the immense Maritime Custom House, with its tower clock that played a fair version of the chimes of faraway Big Ben, or by some accounts, the clock on Westminster Abbey, and which in any case the Shang-hailanders, as the expatriate community liked to be known, called Big Ching.

There may have been one or two touches of charm – the Chinese passersby liked to stroke the paws of the Hongkong Bank's bronze lions, rendering them golden and thus more prosperous-looking – but the stretch of buildings looks, in truth, pretty gloomy. There is a mausoleum-like quality to the architecture, the buildings all heavy and solemn, faced in greyish Ningpo stone and overdesigned, made to look ponderous, imposing and grand. It was as though someone had taken the Woolworth Building from lower Broadway, cloned it several times, and then set it down unsuitably in Cannes, in place of the Carlton Hotel. You look at the Bund today, close your eyes and wonder what might have been, and then open them to find these gaunt memorials to the British. What dismay!

The Chinese seem to have a disdainful view of these once grand structures, though for other reasons, born more of nationalistic pride than the questioning of architectural taste. So there is now a Kentucky Fried Chicken outlet unsuitably placed in the basement of the old Shanghai Club building, and a Citibank automatic teller machine stands outside the Cathay Hotel – it worked perfectly, and I was able to get depressing news of my available balance back in New York in no more than half a minute. Thus are the great monuments to empire being rendered prosaic, and brought down to earth.

However, since foreign tourists like to come and see the buildings, and since they have tended to come at night when traffic on the normally congested Bund is lighter, the city authorities have begun to urge the managers of the string of buildings to illuminate them, to show them off. They may do so only for two hours, the power bill being so high – but when they turn on the switches at about nine each evening, the great buildings do gleam briefly with some sense of their old glory, bathed in the glare of battalions of golden and pink and green arc lights.

I took a boat cruise along the Whangpoo one evening and watched enthralled as the banks of lights came on one by one – first the old consulate, then the bank, then the club. Some buildings remained dark until the very last moment. Whoever, for instance, is now in the old Jardines building (quite probably the Jiangsu Animal By-Products Import and Export Corporation, which has its tenancy hinted at by a dirty iron plate on the wall), clearly likes to keep its electricity bills down to a minimum, and for several moments there was a dark gap in the façade, like a broken tooth. But then the lights flickered on there as well, and for a while the entire serrated wall of stone appeared on fire, a last hurrah for the West's Imperial memory.

Lily was with me, gazing over at the buildings slipping by. Flashbulbs popped from hundreds of watchers on the Bund – people taking pictures of our passing boat, not of the structures at which we were encouraged to look. The photographers were mostly standing in what is now called Whangpoo Park, and Lily pointed to it contemptuously. ‘That's where you put up the sign No Dogs or Chinese. Remember? But now you are gone, and now it is full of Chinese. Dogs too, I expect.’

I argued with her. There had never been any such sign, I said.* The British knew only too well the disadvantages of such impertinence. The story of the sign was a myth, part romantic conceit, part an instance of the Communists' revisionist history of Shanghai, in which all foreigners were regarded as having exploited the place, and having cordially loathed the Chinese among whom they lived. Nothing could be further from the truth, I said – though frankly, of the last point, I wasn't wholly convinced myself.

Lily wasn't listening, and she continued, overexcited. ‘Look at your ridiculous buildings. They're not pretty, not grand. Not useful. We do them up in coloured lights to make them look foolish. They are caricatures. Like circus performers. That's how we think of you now. We dress your great buildings in coloured lights to show everyone how ridiculous you were.’

*

The boat had stopped in the river now. We were beside the Custom House – whose clock was indeed chiming familiarly, and no longer playing ‘The East Is Red' as it had during the Cultural Revolution and for some years afterwards. Then we were turning around to port, and as the Bund began to edge away behind us, so the new buildings of Pudong were coming into view once more. The gigantic monstrosity of the Pearl Tower, of course, and half a dozen other skyscrapers, their summits topped with the currently fashionable syringe-like architectural conceits that gave them extra height at little extra cost. There were huge neon signs for Hitachi and Samsung; behind us the last sign on the Bund, the French Bund, was for Nescafé. The two big new bridges were lit up as well, and in the distance I could see the lights of traffic streaming by on the new elevated périphérique, four lanes wide, two months open, and already crammed with traffic that its planners had underestimated, grossly. This was the new Shanghai ahead: the old, festooned in its brief moment of pastel brilliance, lay on the far side of the boat.

Perhaps Lily was right. Perhaps this was how the Chinese wanted to remember us – as greedy buffoons, as vulgar and immoral intruders who were responsible for giving their city its aura of decadence, dissipation and decay. Perhaps that is why they had been demolishing the inner city so ruthlessly, so wantonly – tearing down the Frenchtown houses that had once been brothels, pounding into rubble the old White Russian mansions on the Avenue Joffre, making libraries out of clubs, hotels out of taipans' houses, fast-food restaurants where once the city's great and good had feasted at a more leisured pace. The Bund, left as it was and lit so extravagantly, was just a caricature of the Shanghai that had been left behind.

The fine new skyscrapers and the glass-and-steel department stores and the great new public buildings – in People's Square particularly – now give Shanghai the appearance she wants and craves. She wants her image, like her self-image, to be one of determined progress and a historyless modernity. Cities like Tokyo and Seoul, which have such an appearance today, owe it largely to war and foreign bombers that smashed and burned most of the old buildings with cordite, high explosive and shrapnel. But the physical Shanghai suffered little from war, even when the Japanese invaded and occupied the place, and certainly when the Communists took the city over.*

So she has had to destroy her past on her own. It is generally accepted that 1990 was the year when this all began: before that, the fortunes of the city were essentially controlled by the Communist masters in Beijing. For more than forty years the city was imprisoned in dust and decay, a bag of bones, a collection of relics of the loathed occupants of old. But in 1990 the brakes were taken off: Shanghai was told by the Communist leadership that she could rebuild herself, make something of herself, present herself as a showcase of the new China. And she started to do so with a vengeance – and as she did her population (for many years static at about 13 million) began to rise, newcomers attracted by the old magnetism, but this time a magnetism that had patriotically Chinese, and not foreign, characteristics.

There can be little doubt that Shanghai is soon going to occupy an exalted place in twenty-first-century China – and a position that, I would guess, may be very much more exalted in China than that occupied by today's Hong Kong, or by its fast-growing neighbour along the Pearl River, Canton. The Shanghainese have a masonic solidarity about them, a grim determination, a ruthlessness that inspires fear and respect throughout all China. Now that they have been unshackled, they have a much greater potential – and many more friends and allies – than their country cousins in the south.

Say ‘Shanghainese' to a man in Chengdu, or Xian, or Harbin, or Beijing, and he will curl his lips in mock terror. Say ‘Cantonese' before a similar audience, and the listener will curl his lips – but in disdain. The Cantonese – ‘rice-eating monkeys’, a Beijing friend remarked to me once – are ill regarded by just about all their brother Chinese. They have performed economically so well, it is widely thought, merely and solely because of the benign invigilation of the British, who kept them cosy and secure and colonized for a century and a half.

‘Who are the really smart Chinese in Hong Kong anyway?’ asked Lily, who detests the Cantonese. ‘They are the Shanghainese businessmen who went there after the revolution. All the really big fellows in Hong Kong are from Shanghai. Everyone in China knows that. And they'll come back – they're coming back here now – now there's money to be made and kept on the Yangtze. You see.

‘The Pearl River has no real future. At least, not compared with this. The British are leaving anyway. The Yangtze is everything. It means so much to China. What does the Pearl River mean? Pah! Not a thing! And, you know, what the people here are doing, they're doing on their own. They learned from you, the foreigners. The Shanghainese are not too proud to learn, that's always true. But what they are doing now, they are doing without any help.

‘Did anyone help build that tower?’ she asked, jerking her thumb towards the floodlit monster. ‘Everyone said it would be impossible, that we'd need to bring in foreign experts. But not at all. We did it ourselves.’

I reminded her that when we were up at the top of the tower she had been laughing unkindly at the ludicrously hyperbolic Mr Su, mocking his evident love affair with the insect structure. She brushed my remark away, carelessly.

‘OK, OK – I may not like it. I admit that it is terribly ugly. And you may not understand this – but in a strange way I'm proud of it. I'm proud because it is homemade, like all of Shanghai's success today.’

I nodded sympathetically. But she had her dander up, and her face was flushed. She wasn't quite finished.

‘You know what? This tower – it says to me that we Chinese are on the inside. We are running the place. We make the decisions. You foreign people are on the outside. At long last. And that is as it should be.’

We took dinner that night in a small underground café called Judy's Place. It was the kind of noisy and bustling spot where expatriates like to come and feel briefly at home. It was not much different from places in Manila and Jakarta and in the less restricted parts of the Middle East. The waitresses were all Chinese students, pretty young women doing time to learn English and make a few renminbi as tips.

The expats were there in their scores, drinking Bass and Corona and San Miguel, giving their Chinese girlfriends strange cocktails with erotic names, wolfing down hamburgers or bowls of chilli. There were all the usual signs pinned up on the tribal notice board: the Hash House Harriers were meeting next day, someone wanted a secondhand mountain bike, a fourth person was wanted to shoot snipe up in Liaoning province in Manchuria. There was a leaving sale of white-wood furniture from Ikea.

On the night we were there, the noisiest table – and there were some noisy tables – was hosted by a handsome young Briton. He was the son of a governor of the Bank of England, as it happened, and he was the current foreign representative of Butterfield & Swire. He was a man in direct line of succession from old Night Soil Brown, the first of the tenants at Hazelwood.

But compared with his predecessors of half a century ago this young man presid's over very little – which is perhaps why so many of his evenings are spent boisterously with the professional expatriate set, and not taking part, as his predecessors once had, in the grander task of the running of Shanghai. His company, still big and important and rich, does not trade as it did along the Yangtze any more. It has no boats. Nor indeed does it have access to Hazelwood – unless any of its staff wish to pay some forty pounds a night to sleep in the old taipan's bedroom. There is no office on the Bund. The firm makes such money as it can – it acts as the agent for Volvo motor cars and is involved in joint ventures, making paint, selling insurance. Most of the Volvos are bought by newly rich Chinese – and indeed, the senior representative of Swires these days is a Chinese. Once, in Hazelwood days, any Chinese employees were merely there as compradors; now – in the days of the Oriental Pearl Tower – the Chinese are the bosses.

For much of the twentieth century, Shanghai may have essentially belonged to Britons like this young man in Judy's Place, and to foreign firms like the one for whom he works. But in general those men and their firms made a bad show of it. The locals learned from them what they could, and they then discarded what was of little worth – including most of what these westerners thought of as their colourful and cheerful past – and then most of the westerners themselves. The Shanghai of the twenty-first century, now so forcefully shunning all that history, casting it away like so much baggage, is indisputably and irrevocably Chinese – just as once, long before the barbarians came in their tall sailing ships, it used to be. The wheel has come full circle as, in China, it always seems to do. The foreigners turned out to be only temporary kings, at best.

When I came back to the ship that night it was raining hard. The sentry outside the naval base was standing ramrod-straight beneath a steel umbrella, not flinching when occasional gusts of wind blew water on his face. No Foreigners Allowed Beyond This Point, read a warning sign, but Lily gripped my arm and pushed me through. She had a pass. The sentry stared fixedly ahead.

The boat on which I was staying was a cruise vessel, detached for the off-season from its usual work on the Upper Yangtze. It was owned by a Chinese man who lived in New York, and he had generously offered to let me sleep in one of the staterooms while I did my work in the city. This night the boat was all but deserted, and it was silent and brilliantly lit. Security around these wharves is tremendous: a Chinese wanting to leave his country could scale the razor wire and be on a foreign-bound ship. Like the Soviets in the old days, the Chinese authorities keep their borders closed tight, and this, technically speaking, was a border too.

I had been on this quayside once before, when Queen Elizabeth, who had been touring China, was about to make her farewell and board the royal yacht Britannia for the voyage home.* The yacht was moored alongside where my ship, the Princess Jeannie, was berthed and as a Royal Marine band played sea shanties and anthems, so the lights along the Bund were switched on. The Chinese president of the day was an old war hero named Yang Shangkun, and I remember that he shook my hand, very affably. It was a grand evening, a moment when the old, dead Shanghai came briefly alive, stirred in her sleep.

Nowadays the city is fully awake all the time. All night there are lights, cars, crowds, the sounds of distant music and shouting, the sirens of vessels passing by on their way to and from the sea. Our ship's arc lights blazed down on the water, and for a fathom or so the Whangpoo had a kind of translucence to it, the blackness rubbed briefly away. Lily and I were gazing down at it, looking halfheartedly for fish, when a body bobbed gently into view.

It was that of a man in his thirties. He was floating face up, fully clothed, and his eyes were open. His would not be the first body I saw on this voyage, nor would it be the most disturbing: but the image of his face staring up at me through the waters was one I carried for many days. How he had died, how he had come to be in the waters, whom he had left behind – these were questions I could never answer. But as to notifying the police, or trying to haul the body out – Lily gave a dismissive wave.

‘You see them all the time,’ she said. ‘And you'll see worse. The river is a cemetery for those who can't afford a proper burial. Just let him be. He'll just drift out to sea, and that'll be an end to him.’