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.
Under the Communists, Shanghai's businesses were nationalized and most foreign firms moved their offices from Shanghai to Hong Kong. The city also fell out of favour with the political elite until the Cultural Revolution, when Mao Zedong decided to make it the new power base. Shanghai was a centre of Cultural Revolution until Mao's death in 1976.
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