Shanghai dates back to the Neolithic Period. This area was marshland until the Song Dynasty (AD 960-1126), when Mongols and other northern nomad invaders officially established the town. The increasing trade turned Shanghai into a prosperous place. By 1291, it became a county capital. After that the economy saw even greater development, especially in cotton and textile industries.
After 1840, the British Army opened Shanghai as a treaty port and set up their concession. The city flourished as a center of commerce between east and west. Following the example, many other countries also opened enterprises engaged in shipping, printing, architecture, pharmacy, and public utilities. Shanghai and Western power coexisted for almost a century.
After a prosperous period of time, Shanghai started to suffer from World War II. The lack of raw material resulted in economic downturn and severe recession. In 1943 British and Americans gave up their colonial rights to their new allies - the Nationalist Chinese. They took over Shanghai after the Japanese surrender in 1945. However, four years later, the city again fell to the Red Army.
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