Shanghai Municipality (), commonly known as Shanghai (, postal romanization: ;1947 "Chinese Republic, Outer Mongolia," 1947. p. 6. This map uses postal romanization, but with some uncommon forms of spelling. Wade–Giles: ), abbreviated as "Hu" (), was one of the 12 direct-controlled municipalities established by the Republic of China in mainland China, and at the time was the largest city in the Far East and Asia, as well as China's most important treaty port and industrial centre,Chinese Communist Party Central Committee, "Telegram Congratulating the Liberation of Shanghai" (30 May 1949): "China's and Asia's largest city, China's most important industrial and commercial centre, Shanghai, was liberated on the 27th." and was known as the "Paris of the Orient". It was described by the then- Chiang Kai-shek as "the focal point of Chinese and foreign attention".Speech during the Battle of Shanghai, 1937.

In 1927, the Shanghai Special Municipality was established as a direct-controlled municipality. Following the January 28 incident of 1932, China and Japan signed an armistice agreement after negotiations, and Shanghai became a demilitarised zone. During the Battle of Shanghai in 1937, Japanese forces occupied the Chinese-administered areas of Shanghai and parts of the Shanghai International Settlement, and subsequently propped up puppet regimes including the Great Way Municipal Government of Shanghai.

After victory in the Second Sino-Japanese War in 1945, the National Government took over Shanghai, ending the long-established concession system. The Chinese Communist Party reignited fighting in Manchuria, triggering the Second Chinese Civil War. Shanghai's economy was severely damaged by the war, and after the civil war resumed, inflation caused by the fighting led to soaring prices. In 1948, the ROC government's Gold Yuan reform failed, causing Shanghai's economy to collapse further.

In May 1949, the People's Liberation Army launched the Battle of Shanghai; after several days of fierce fighting, it took control of the entire city on 27 May, and the central government relocated part of its assets and personnel to Taiwan. On 28 May, the ceased operations, and acting mayor transferred power to the CCP-appointed mayor Chen Yi.

History Early period of direct administration

In 1925, the Beiyang government had already planned to carve out the northern part of Shanghai County and the southern part of Baoshan County to create the Songhu Special Municipality, but this was never realised. On 29 March 1927 (the 16th year of the Republic), the Wuhan National Government established the Shanghai Special Municipality in outside the concessions, and established the Provisional Municipal Government of Shanghai Special Municipality to administer it. At the same time, 17 urban and rural areas previously belonging to Shanghai County and Baoshan County under were incorporated, giving a total area of 494 square kilometres. Shanghai formally separated from Jiangsu Province's jurisdiction and came under the direct authority of the Executive Yuan. After the April 12 incident, the Provisional Municipal Government of Shanghai Special Municipality effectively ceased operations and was ultimately taken over by the Kuomintang Shanghai Provisional Political Committee.

After the establishment of the National Government of China (hereafter "National Government"), the Shanghai Special Municipality Government was formally constituted on 7 July 1927 in accordance with the Provisional Regulations of the Shanghai Special Municipality. in Chinese. Subsequently, the promulgation of the Organic Law of the Shanghai Special Municipality and the Organic Law of Shanghai Municipality gradually established a two-tier administrative management system at the municipal and district levels.

Because of its proximity to the and its role as a centre of foreign trade, large numbers of financial institutions—including the four major banks—established their headquarters in Shanghai, further consolidating its status as the national economic and financial centre. As Nanjing was designated the ROC capital, many politicians who had previously gathered in and moved south, and many chose to settle in the Shanghai concessions. Both the concession areas and the Chinese-administered areas of Shanghai developed rapidly during the subsequent Golden Decade of the National Government.

In May 1930, the National Government issued the Organic Law of Shanghai Municipality, reorganising the Shanghai Special Municipality as Shanghai Municipality, and in July of the same year established the .

Demilitarisation

After the Mukden incident in 1931 (the 20th year of the Republic), anti-Japanese sentiment ran high among the Chinese public, and Japan announced it would take self-defence measures to protect the interests of Japanese nationals. On 18 January 1932 (the 21st year of the Republic), Japanese monks passing the gate of the on Mayan Road in the Chinese-administered area adjacent to the eastern district (Yangshùpu) of the Shanghai International Settlement were beaten by factory pickets, resulting in one death; this became known as the . Japanese residents retaliated violently, burning down the Sanyou factory, killing Chinese police constables in the concession, and attacking Chinese shops. At 23:30 on 28 January, Japanese naval landing forces advanced westward from North Sichuan Road to occupy the Songhu Railway defence line, where they met fierce resistance from the 19th Route Army at Tiantong'an station. In the early morning of 29 January, Japanese aircraft bombed the Chinese-administered areas of Zhabei; the Commercial Press at 584 Baoshan Road and the Oriental Library (China's largest private library, housing over 300,000 volumes) were both destroyed. Intense military conflict between China and Japan in the Zhabei district of Shanghai lasted over a month; Japan committed a total force of three divisions and 70,000 troops, while Zhang Zhizhong's 5th Army also joined the fighting in Shanghai, and the Nanjing National Government even temporarily relocated to Luoyang to demonstrate its resolve not to capitulate (returning to Nanjing at the end of the year). It was not until 2 March, when Japanese forces landed at Taicang Liuhe and Chinese troops found themselves threatened from the rear, that a withdrawal began; a ceasefire was declared the following day. On 5 May, China and Japan signed the . Japanese troops returned to their pre-war positions (the northern and eastern districts of the Shanghai International Settlement and their extraterritorially built roads), while ROC troops temporarily remained at their current positions (from Anting on the Jing–Hu Railway to Hupu on the Yangtze). Shanghai was demilitarised. Some 4,204 businesses in the Chinese-administered Zhabei area were destroyed, along with 19,700 dwellings; this event is historically known as the January 28 incident.

Japanese occupation

On 13 August 1937 (the 26th year of the Republic), the Battle of Shanghai broke out, marking the beginning of the full-scale war of resistance. Chiang Kai-shek mobilised approximately 700,000 Chinese troops (including most of his elite forces) and fought a fierce three-month battle against Japanese forces near Shanghai. Although the National Revolutionary Army paid an enormous price, it was ultimately defeated by the superior Japanese forces, and Japanese troops occupied all of Shanghai except the concessions. During the Battle of Shanghai, the previously bustling Zhabei and Nanshi districts suffered severe damage and the Chinese-administered areas largely became slums. The northern half of the Shanghai International Settlement—comprising present-day and Yangpu—served as a Japanese military zone and sphere of influence, and was as devastated as the Chinese-administered areas. Tongji University (Wusong), Fudan University (Jiangwan), and Shanghai Law College were all bombed. The Shanghai French Concession and the portion of the Shanghai International Settlement south of Suzhou Creek found themselves in a unique situation, giving rise to the that lasted over four years. In October 1938, Shanghai was renamed Shanghai Special Municipality. After the outbreak of the Pacific War in 1941 (the 30th year of the Republic), Japanese forces began occupying the concessions, and from 1943 (the 32nd year of the Republic) the concessions ceased to exist.

Post-war period

In 1945 (the 34th year of the Republic), Shanghai was recovered after the victory in the war of resistance and the National Government took control of Shanghai from the Japanese. Soon after the end of hostilities, in 1946 (the 35th year of the Republic) large-scale conflict broke out in Manchuria between the National Government-controlled National Revolutionary Army and the Chinese Communist Party-led . The fighting initially took place in Manchuria and had not yet affected Shanghai, but as the conflict expanded, the economic burden of war mounted and the economy progressively collapsed. Shanghai's economy fell into crisis, prices soared, and the government's economic and currency reform launched in 1948 (the 37th year of the Republic) also ended in failure. At the end of that year, the Huaihai Campaign, fought by the Nationalist and Communist forces near Xuzhou, resulted in the destruction of nearly 600,000 Nationalist troops; the People's Liberation Army seized the vast area north of the middle and lower reaches of the Yangtze River. The principal Nationalist forces on the East China and Central Plains fronts were largely annihilated, and the capital Nanjing as well as the financial centre Shanghai came under direct threat from the PLA.

On the night of 20 April 1949 (the 38th year of the Republic), the People's Liberation Army launched the Jing–Hu–Hang Campaign (Yangtze Crossing Campaign), and by the early morning of the 22nd had successfully breached the Nationalist ROC Army's lower Yangtze defence line. On the 23rd, the PLA captured Nanjing, and the Republic of China government relocated its capital to Guangzhou. In Shanghai, Nationalist forces relied on 250,000 troops and numerous fortifications to hold the city. The PLA decided to avoid directly attacking the urban area to reduce losses, and postponed the attack until after 10 May, concentrating forces in preparation for a pincer assault to encircle Shanghai.

The PLA launched an offensive on two lines—north and south—against Shanghai's outer defences. The northern forces gradually broke through Nationalist defensive lines at Wusong, Yuepu and other places, while the southern forces captured key towns surrounding Pudong and cut off Nationalist supply lines. After several days of fierce fighting, the PLA broke through the main Nationalist positions, blockaded the sea area east of Gaoqiao, and forced the main Nationalist forces to contract towards Wusong and the surrounding urban area. At this point, the outer Nationalist defensive system had been completely destroyed.

On the night of 23 May, the PLA launched its general offensive on the Shanghai urban area. On the 25th, the Nationalist garrison surrendered en masse, including the deputy commander of the Songhu Garrison, , and multiple units. By the afternoon of the 27th, the PLA had completely occupied the Shanghai urban area. On the 28th, the Shanghai Municipal Government ceased operations, and acting mayor transferred power to the CCP-appointed mayor of Shanghai, Chen Yi. On the same day, the Shanghai Municipal People's Government was formally established at the former site of the Shanghai Municipal Government.

Although the government was dissolved, the ROC on Taiwan would continue to claim Shanghai as part of its territory, but the democratization and constitutional reforms would downplay the claims of it.

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Administrative divisions

Territory