Shanghai Express

A year ago last month the Communists took Shanghai, one of the great (pop. 6,000,000) cities of the world. From accounts of refugees and from reports in Red China's own press it was possible last week to draw a picture of life in Shanghai in the first year of Communist rule.

In the foreground was an appalling unemployment problem. The chairman of Shanghai's General Labor Union in a report to party bosses had recently given the following partial breakdown of unemployment: construction workers, 31,000 (95%); cigarette factory workers, 30,000 (75%); wharf coolies, 10,000 (32%); merchant seamen, 20,000; shop & sales clerks, 20,000. He admitted widespread unemployment in the papermaking, matchmaking, silk-weaving, rubber and cotton textile industries. On the basis of these figures, Hong Kong observers reckoned that 600,000 people were close to starvation in Shanghai.

"Have You Brought Buns?" Systematically, the Communists are destroying Shanghai's business class. Their chief instrument is the forced government loan. A quota is assigned to each category of industry or business, and the businessmen belonging to each group are ordered to attend a meeting at which they are addressed by Communist Party organizers. Sometimes the Communists open the meeting with the remark: "Have you brought buns? This may take some time." Speaking in relays, the Communists harangue the meeting until the bonds are bought.

Hong Kong sources estimated that about 1,000 Shanghai business managers have slipped away since the forced loans were launched last March, bringing the total number of Shanghai concerns closed down since the Communists arrived to 4,000, including 2,000 commercial companies and 1,000 factories. Of the 500 Chinese banks in Shanghai, less than 100 are still open, and half of these have petitioned the government for permission to close.

Where private enterprise has been forced out, the Communists have slipped in. Small branches of the Communist-controlled People's Bank occupy sites formerly held by private banks. When a private rice shop closes its doors, more than likely it will open a few days later as a sales office of the government company. Most of the city's foreign-owned transit and power companies are financing operational deficits by heavy borrowings from the People's Bank, which puts them virtually in the hands of the government.

"We Reduce Prices with Pain." Fewer rickshas, buses and pedicabs are to be seen on the streets. Automobiles are mostly official; gas for private cars costs $1.40 a gallon. An unused 1948 Buick, offered for sale at $500 recently, found no buyers. Casualties are highest among high-class restaurants, bars, cafes, Western-style tailors, fashion shops and department stores. Said a Chinese trader who recently visited Hong Kong: "Between the Bund and the Park Hotel the show windows of all stores --including the big proud ones like Wing On, Sincere, Sun Sun and the Sun--are plastered with posters which shout: 'We Reduce Prices with Pain!', 'Shop Closing Down', 'Prices Falling Below Cost' . . . Swank stores now offer such unglamorous goods as salted fish, seaweed, salt and crude cooking oil."

The big private hotels such as the Cathay, Palace and Park have few tenants. Some hotels attempt to attract permanent residents by offering monthly rates of $25 to $50. The British-operated Shanghai Club ("Longest Bar in the World") has finally been compelled to open its doors to women. Night life is negligible. Shops close at 6 p.m., clubs at 10:30 p.m. Those who venture out at night expect to be accosted by young Communists who demand to be shown "Residence Certificates" and other papers.

"Conditions of Anarchy." Reports drifted in to Hong Kong that the Communists, alarmed at the economic havoc in Shanghai, might be considering a temporary reversal along the lines of Lenin's 1921 New Economic Policy. There were stories in the Chinese Communist press praising private enterprise and criticizing state monopoly. But the probability of any real change in Communist policy was slight. Any doubt that the Communists were not fully aware of what they were doing had already been answered by Liu Shao-chi, China's No. 2 Communist boss, in a May 1 speech. Said Liu: "The old economic order has been destroyed . . . The new order is not yet established. We are facing . . . conditions of anarchy." In the Stalinist pattern, stamped on a dozen countries, economic anarchy had always been a prerequisite of Soviet order.

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