From a distance, Shanghai rises like an ever-expanding city of the future, its towering clusters of sleek, space-age skyscrapers dominating the skyline. Its population is more than twice that of New York City, occupying an area almost six times the size. This is the city that celebrated the opening of its 101-story World Financial Center — the planet’s second-tallest building — with the groundbreaking of the $2.2 billion, 121-story Shanghai Tower, designed to surpass it.

Zoom in closer, however, and the real Shanghai comes into focus: the surge of financiers around the old British bank buildings of the Bund, the high-heeled clack of shoppers along Nanjing Road, the hum of cameras among the thousand-year-old stone sculptures of the Old Town and the incense-clouded Jade Buddha temple, the gasp of joy from a child flying a kite along the banks of the Huangpu River. Despite its centuries of history, despite its futuristic appearance, the “Paris of the East” is still present and immediate.

As the center of finance and trade for mainland China, Shanghai is the engine driving one of the world’s most dynamic economies: Both Shanghai’s and China’s per-capita gross domestic product grew by 85 percent from 1992 to 2006. Shanghai’s recent growth is all the more remarkable given its exclusion from government economic reforms until 1991 — a decade later than most of southern China. The explosion in growth that followed allowed the high-rise Pudong District to spring up almost overnight and has increased the size of Shanghai’s middle class. The sale of automobile licenses, for example, grew from about 7,000 per year before 2000 to roughly 5,000 a month afterward, leaving the city’s streets choked with new cars.

Don’t expect to spend your time in Shanghai mired in traffic, however. The city has added eight subway lines in the last seven years and expects to launch four more by 2010. The Shanghai Metro, together with one of the world’s most extensive bus systems, a vast fleet of taxis and the world’s first commercial magnetic levitation train — which carries passengers the 18.6 miles from Pudong International Airport (PVG) to the Longyang Road subway station in seven minutes and 21 seconds at speeds of up to 268 mph — make getting around the city a breeze, provided you can find your destination within the nest of skyscrapers.

The transportation network will be put to the test with the arrival of Expo 2010. Shanghai is pulling out all the stops for the international exhibition, even moving the 130-year-old Jiangnan Shipyard to create room for the fair by the banks of the Huangpu River. While the global recession may cause attendance to fall far below the 70 million the Chinese government predicted in 2002, the event could still be a golden opportunity for China to showcase its industries.

“There may be a whole lot of [international] companies deferring their decision to attend until the last minute,” said Tate Miller, former assistant dean for academic programs at the Monterey Institute of International Studies.

Miller, who recently completed a one-year trade policy assignment in China and previously lectured at Beijing University, added: “The Chinese, driven to get their brands out there, will probably look at this as a gift from the gods. There will be a massive effort domestically to show a strong face.”

Shanghai has straddled two worlds since the first Western traders arrived at the mouth of the Yangtze during the Qing Dynasty. The city’s 18 million residents include about 500,000 foreigners, making it one of China’s most cosmopolitan cities. Yet Shanghai’s well-educated, upper-middle-class residents maintain a lifestyle — and a language — that sets them apart from the rest of the nation: Even Mandarin speakers find Shanghainese incomprehensible. The city’s flying-saucer skyscrapers and taxicabs with tiny television screens can make it seem, in the words of one tour guide, “not the real China, but the future of China.”  At the same time, Shanghai’s luxury hotels are just a few blocks from open-air markets where the region’s famed fuzzy crabs scuttle in plastic pools and old men shout over games of mah-jongg.

Shanghai continues to operate one of the world’s busiest ports. With 560 million tons of cargo handled in 2007, it remains second only to Singapore. As the heart of mainland China’s export-based economy, the city is feeling the sting of the global economic crisis. But while the recession might temper the rise of skyscrapers, it’s unlikely to do so for long. In its 1,100-year journey from provincial port to “Paris of the East” to the cradle of the Communist revolution to the headquarters of China’s new economic empire, Shanghai has always found ways to evolve — and turn a profit at the same time.

INFO TO GO

Pudong International Airport (PVG) is about 20 miles from central Shanghai. The Maglev Train connects the airport to the metro line at Longyang station. Journey time is about eight minutes. Trains run every 15 minutes. Taxis to Shanghai take 25–40 minutes; locate the appropriate line for your destination and be sure the driver uses the meter. A metro line will link PVG and Hong Qiao International Airport (SHA) in time for the World Expo in 2010.

JUST THE FACTS

Time Zone: GMT +8
Phone Code: 86 China, 21 Shanghai
Currency: Chinese renminbi
Entry/exit requirements:Visas are required for U.S. citizens and must be obtained from a Chinese embassy or consulate before travel.
Official Language: Standard Mandarin and Shanghainese. English is widely spoken.
Key Industries: Chemicals, electronics, machine building, metallurgy, shipbuilding, textiles, banking, finance and shipping

LODGING

ASTOR HOUSE HOTEL
Established in 1846 as China’s first Western hotel, the 130 guestrooms feature Victorian décor, air conditioning and satellite TV. $$
ASTOR HOUSE HOTEL
15 Huangpu Road, Hongkou District
tel 86 21 6324 6388
http://www.pujianghotel.com

HYATT ON THE BUND
One of Shanghai’s newest luxury hotels, the 631-room ultramodern towers include the latest of everything and a rooftop bar with splendid views. $$$$
HYATT ON THE BUND
199 Huang Pu Road
tel 86 21 6393 1234
http://shanghai.bund.hyatt.com

LONGEMONT HOTEL SHANGHAI
This elegant but comfortable hotel offers 511 spacious guestrooms with skyline views and the largest ballroom in the central Puxi District. $$
LONGEMONT HOTEL SHANGHAI
1116 W. Yan An Road, Changning District
tel 86 21 6115 9988
http://www.thelongemonthotels.com

DINING

BI FENG TANG
Feast on steamed dumplings, steamed garlic chives, barbecued pork ribs, pork buns and egg custards in a relaxed atmosphere.
BI FENG TANG
1333 Nanjing Xi Lu
tel 86 21 6279 0738

GLAMOUR BAR
Late-night spot to unwind where guests alternate between candlelit couches and a wrought-iron balcony overlooking the river’s reflected lights.$$
GLAMOUR BAR
20 Guangdong Lu
tel 86 21 6350 9988
http://www.m-onthebund.com

WE MAKE THE BEST NOODLES
The boast just might be true — and generous bowls of noodle soup fortify shoppers for Nanjing Road’s retail mecca. $
WE MAKE THE BEST NOODLES
82 Huanghe Road
tel 86 21 5375 6008

DIVERSIONS

Traveling around Shanghai can feel like a journey through time as well as space. Early morning is the best time to marvel at the serene beauty of the 120-year-old Jade Buddha Monastery (tel 86 21 6266 3668, http://www.yufotemple.com); in addition to its six-feet-two statue of the seated Buddha, you may find a mouth-watering vegetarian meal near the tranquil koi ponds of the temple court. Yuyuan Garden (tel 86 21 6326 0830) is more than a feast for the eyes: The tea settings, ink stones and silk banners of its restored mansions provide a sense of upper-middle-class life in pre-revolutionary China. At the same time, its Ming Dynasty gardens and lightning-bolt-shaped bridges (to prevent evil spirits, who prefer to travel in a straight line, from crossing the river) make it an oasis both from the bustling city and the vendors who throng the rest of Shanghai’s Old Town.

For those interested in shopping, of course, the Old Town is paradise on Earth — but be ready to bargain for the jewelry, antiques, art and tea in its kiosks and underground malls.

Escape the heat of midday along the banks of the Huangpu River, with the panorama of Pudong’s skyscrapers on one side and the European grandeur of The Bund on the other. Shanghai’s former British concession retains the charm of 1930s noir films and pulp novels; as the Wall Street of Asia, it’s also home to corporate headquarters and financial institutions, and a great place to enjoy lunch.

Pass through the kaleidoscopic, half-mile pedestrian sightseeing tunnel from the Bund to Pudong and emerge into China’s future: the world’s first high-speed maglev train station, the dizzying heights of the World Financial Center and the shiny pink sphere of the Oriental Pearl TV Tower (tel 86 21 5879 1888). In addition to its 1,535-foot vantage point, the world’s third-tallest tower also includes the Shanghai Municipal History Museum (tel 86 21 5879 3003) at its base, where you can wander reconstructed streets, opium dens, speakeasies and nightclubs of the city’s deliciously dark past.

In other areas of Shanghai, the dining might be as elegant and the shopping as decadent, but it’s difficult to imagine a more charming spot than the former French Concession for relaxing in an outdoor café by moonlight. Gather your second wind here before returning to the Bund for a drink at a nightclub or a midnight stroll along the neon-bathed Huangpu.

If you’re curious to find out how silk goes from caterpillar to cocktail dress — or are looking for a great deal on a silk comforter — tour the JuLong Silk Exhibition Hall (tel 86 21 6359 2848, http://www.sunnysilk.com). And if your schedule allows, take the drive from Shanghai to the “water village” of Zhujiajiao. The 1,700-year-old village, called the “Venice of Shanghai,” was rescued from development by the demands of honeymooning couples and Chinese film directors searching for romance, nostalgia and natural beauty. Walk past the vendors selling sandalwood carvings and red clay teapots, step aboard a covered canal boat, listen to the song of the boatwoman as she pushes you beneath Ming-era stone bridges, and you can almost imagine yourself in the Shanghai of 400 years ago, when the only foreign visitors were traders and pirates.

Checking in with Tate Miller
Senior Lecturer at the Monterey Institute of International Studies

CHINA HAS A ROBUST, DYNAMIC ECONOMY FUELED BY EXPORTS, MANUFACTURING AND FINANCE. DOES THAT PLACE IT IN A BETTER POSITION TO WITHSTAND THE GLOBAL RECESSION?
A lot of experts say that exports from China will more than make up for any drop in U.S. exports. I feel that’s simply not true. If the U.S. economy is having an impact in Europe, South America and the Middle East, it would certainly impact China’s economy. Even though some sectors are still increasing exports, there’s been a lot of talk of factories slowing down, orders stopped and people trying to be retrained and sent to other places.

HOW IS THE CURRENT ECONOMIC CLIMATE LIKELY TO AFFECT OPPORTUNITIES FOR FOREIGN INVESTMENT?
Often the Chinese ask foreign investors for a combination of capital and technology. I think now they will ask their American counterparts to put down less cash, but to increase the value of their technology to keep the deal at the same value. They may also extend their tax benefits, making land free for a 25-year period. But they’re definitely trying to keep foreign direct investment on the up-tick, and they’re willing to be creative to make that happen.

SHANGHAI’S REAL ESTATE MARKET HAS BEEN BOOMING IN RECENT YEARS. IS THAT CHANGING?
You’ll probably see a lot of vacant office space. A lot of buildings have been on the market for quite some time, and the owners are desperate to offload them because of pressure from banks to pay up. In Beijing, which leads the real estate market in China, developers who five years ago were pre-selling units now have projects with 30 to 40 percent of units unsold.

IS THE GOVERNMENT’S ROLE IN THE ECONOMY A HELP OR HINDRANCE IN THE CURRENT SITUATION?
There’s nothing unique about China that will shield it from the bumpy ride ahead. In some sectors, they could be looking at the worst of all worlds: massive layoffs leading to potential social upheaval. But Chinese regulators can point to the American system and criticize it for not saving us. If they weather the crisis better than other countries, it will strengthen the government’s overall credibility and validate its industrial policies — the government would have a heavy hand in regulating industrial zones and labor.