26 October 2016
A tale of two cities: Shanghai (above), China's largest urban center, and Hong Kong, the Asian financial center, have close ties despite their rivalry. Photos: Zhang Haitao/HK govt
A tale of two cities: Shanghai (above), China's largest urban center, and Hong Kong, the Asian financial center, have close ties despite their rivalry. Photos: Zhang Haitao/HK govt

Shanghainese in Hong Kong: a tale of two cities

When Hong Kong Island was made a crown colony in 1842 with the signing of the Treaty of Nanking after the First Opium War, Shanghai also got a special mention in the document as one of the four new “treaty ports” where foreign merchants were to be allowed to do business freely with anyone.

The treaty marked the start of Hong Kong; before that the place was nothing more than some mosquito-ridden rocks east of the Pearl River estuary, “a barren island with hardly a house on it”.

But that was not the case of Shanghai. Long before the British laid their eyes on the city, Shanghai had already been a part of Jiangnan (江南), or the Yangtze River Delta, a breadbasket that contributed almost a third of the Qing dynasty’s tax income.

In 1845 the British established a settlement along the banks of the Huangpu River at the heart of Shanghai for the furtherance of their commercial interests and later the waterfront strip evolved into the iconic Bund we know it today.

Already a burgeoning town, Shanghai was much more favored by British merchants than Hong Kong. After all, who would bet on a humid, desolate islet that stood little chance of its own under the shadow of Canton?

Decades after Britain carved out concessions in Shanghai, expatriates, envoys and pastors there thought they were head and shoulders above their compatriots stationed in the Crown Colony of Hong Kong.

In fact, a grand neo-classical, luxuriously decorated edifice was built on Shanghai’s Bund way back in 1923 to serve as the regional head office of The Hongkong and Shanghai Banking Corporation, but the bank’s headquarters in Hong Kong weren’t rebuilt until ten years later. 

Social tumult brought numerous refugees to Hong Kong following the downfall of the Qing dynasty and when the precarious republican government could not exert control over many parts of the nation, but most of the new immigrants chiefly came from Canton.

Hong Kong’s commercial might was largely peripheral when Shanghai was still the undisputable metropolis of the Far East, when citizens of major Western powers, not just British, flocked there during the ensuing decades and those who stayed for long periods – some for generations – called themselves “Shanghailanders”. Before long it became one of the most populous cities in the world.

Hong Kong fell into Japanese occupation from 1941 to 1945 but Shanghai retained its predominance in trade and commerce during the Sino-Japanese War as the city’s international settlement thrived on the influx of capital thanks to the district’s safe haven status.

China’s civil war and, in particular, the mass exodus triggered by the communist party’s taking over of Shanghai in 1949, ultimately lent the crucial lift to Hong Kong’s ascent, whose population swelled by almost 800,000 in 1949 alone, according to government archives.

For the first time Hong Kong saw a robust inflow of people from outside Canton, many of whom were businessmen from Shanghai, who fled communist rule after they were tagged as members of the counter-revolutionary bourgeoisie and their homes and assets confiscated. British Hong Kong became their port of refuge.

Together with their business acumen, Shanghai tycoons and small factory owners marshaled their capital southward, and in the next decade they gained their footing in Hong Kong when the territory took flight as an emerging manufacturing base for textiles, toys and other light industries since the early 1960s.

In the following decades business gurus from Shanghai and its neighboring urban centers like Ningbo, Suzhou and Wuxi scaled new heights in Hong Kong.

Ningbo-born Sir Run Run Shaw moved his family’s film operations from Shanghai to Hong Kong before the Japanese invasion and founded the Shaw Brothers Studio and subsequently TVB.

So did Shaw’s townsman Pao Yue-kong (包玉剛) who went to Hong Kong in 1949, having managed to remit much of the family’s assets and money from Shanghai before events made that impossible.

Pao later inaugurated his shipping empire and became Hong Kong’s richest man in the 1980s as the territory’s first businessman of truly international stature.

Pao’s son-in-law Peter Woo Kwong-ching later became chairman of Wharf Holdings and Wheelock & Co. Shipping magnate Tung Chao-yung was also from Shanghai, whose elder son Tung Chee-hwa became the city’s first chief executive post 1997.

Starting from the 1980s, members of the second-generation Shanghainese started to move up in the local political hierarchy as well as in the intelligentsia. They include former Chief Secretary Henry Tang Ying-yen and the incumbent Carrie Lam Cheng Yuet-ngor, former Legislative Council president Rita Fan Hsu Lai-tai, executive councilor Fanny Law Fan Chiu-fun, Chinese University president Joseph Sung Jao-Yiu and Hong Kong’s first Nobel laureate, “father of broadband” Charles Kao Kuen.

The long-standing, interwoven relations between Hong Kong and Shanghai have once again shifted back to economic rivalry from 2000 onwards, especially after Shanghai surpassed Hong Kong in terms of gross domestic product for the first time in 2011.

However, the city still trails Hong Kong by a large margin on a per capita basis, US$15,010 versus US$40,179 in 2014, as Shanghai’s population – over 24 million – is more than three times that of Hong Kong. 

One of the hotly contested fields between the twin cities is finance, but since the renminbi still has a long way to go with no timetable for free convertibility, Shanghai is somehow off from being a global financial center to rival us.

Hong Kong is also the largest source of direct foreign investment to Shanghai.

But one thing is sure: Shanghai has been catching up quickly with the ambition to regain its old days of glory. Many Shanghainese in Hong Kong may have some mixed feelings when it comes to the question of whether Hong Kong will be marginalized in the process.

The fact is that both cities have more common interests when Hong Kong is a role model for Shanghai in finance and stock market. Thus, if Hong Kong falters, the real beneficiary may probably be Singapore, not Shanghai.

– Contact us at [email protected]

Read more:

Why Shanghai will not gain if Hong Kong stumbles


Hong Kong shipping tycoon Pao Yue-kong was received by Deng Xiaoping in Beijing in the 1980s. Pao played a key role during the Sino-British talks. Photo: Xinhua

The Ningbo-born Sir Run Run Shaw founded his film and TV empire in Hong Kong after marshaling his family business from Shanghai before China fell to the communists. Photo: Shaw Brothers Pictures

EJ Insight writer

EJI Weekly Newsletter