Shanghai

Shanghai is China's financial capital and the country's largest city by GDP, operating under a municipal government that reports directly to Beijing rather than through a provincial intermediary — a direct-administered municipality status shared with only three other cities (Beijing, Tianjin, Chongqing). The Pudong New Area, established in 1990, transformed Shanghai from a declining industrial port into a global financial centre in three decades, using Special Economic Zone policies to attract foreign investment while maintaining party control over strategic sectors. The Shanghai Free Trade Zone, launched in 2013 as a testing ground for capital account liberalisation and regulatory reform, functions as a controlled experiment — the party can observe the effects of liberalisation in a contained environment before deciding whether to scale nationally. Shanghai's governance challenge is that it must simultaneously serve as China's interface with global capitalism and a loyal component of a centrally planned political system, creating a permanent tension between financial openness and political control.