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COLUMN ONE : Shanghai: Surprising Rising Star : Once mistrusted by the Communists, the city is now the envy of China. Its economic prowess has won favor with the nation's leaders and political plums, including top jobs for native sons.


SHANGHAI, China — Xu Kuangdi, Shanghai's urbane deputy mayor, likes to regale foreign guests with the story of a provincial official who recently visited this booming city on China's east coast.

The traffic was, as usual, impossible. Thousands of Volkswagen sedans, produced here in China's largest auto factory, clogged narrow lanes designed a century ago for rickshaws. Dust from 4,000 construction sites clouded the air. Sulfurous emissions from factories added the scent of heavy industry.

Although the distance from Hong Qiao International Airport to Shanghai City Hall is a little more than 10 miles, it took the visiting official nearly two hours to cover the route.

But instead of being irritated by the halting journey, the official, from impoverished Guizhou province, was ecstatic.

"I hope someday in my province we can have such a traffic problem," he told his apologetic host. In his provincial capital, the official informed Xu sadly, it takes only seven minutes to go from the airport to City Hall. There are too few automobiles and too few construction projects to block the way.

Shanghai, with an official population of 13 million people and an additional 2 million construction workers imported from the provinces, may be polluted, dusty and choking in traffic. But today it is the envy of all China, emerging as the leading symbol of the country's incipient economic might and, increasingly, as a star player on the political stage.

Once mistrusted by the Communist leadership because of its colonial-era history as a treaty port where foreign powers engaged in the opium trade, Shanghai is back in vogue, even with the Communists.

President Jiang Zemin, the heir-apparent to ailing 90-year-old senior leader Deng Xiaoping, was once mayor of Shanghai.

So was the country's powerful economic czar, Vice Premier Zhu Rongji.

In October, two more Shanghai party officials, current Mayor Huang Ju and local party chief Wu Bangguo, were appointed to the 20-member Politburo of the Chinese Communist Party Central Committee--raising to four the Shanghai representation on the country's most powerful ruling body.

In political commentaries, the catty Hong Kong newspapers began to talk of a "Shanghai gang" in the center of Chinese politics.

"Officials from Shanghai now occupy one-fifth of the important Politburo posts," announced the newspaper Ming Pao.

South China Morning Post columnist Willy Wo-lap Lam, Hong Kong's leading pundit on Chinese politics, proclaimed it the "ascendancy of the Shanghai faction."

The appointments provoked jealousy in other cities, including the haughty capital, Beijing, where outside competition for preeminence is not appreciated.

"If a young politician wants to be a high-ranking official today," one Foreign Ministry employee in Beijing commented caustically, "he should move to Shanghai."

In fact, the key political appointments were at least partly a reward for the city's enormous contribution to the central treasury, which gets about one-fourth of its tax revenue from the Shanghai industrial base.

The appointments also reflected a concerted effort, initiated by Deng himself, to shift some of the economic spotlight away from southern Guangdong province, near Hong Kong, which is viewed by the Communist leadership as politically unstable.

In June, 1989, after the army crackdown on the Tian An Men Square pro-democracy demonstrators, more than 500,000 protesters took to the streets in Hong Kong. Anti-government sentiments were just as strong across the border, especially in the Pearl River metropolis Guangzhou (Canton).

Until then, most of the central government's financial commitment to the "special economic zones" was in the south, in Hainan Island and Guangdong provinces.

"When they saw all those Hong Kong people in the streets," said a diplomat based in Shanghai, "I think the government suddenly realized that it had too many eggs in the south China basket, where things looked out of control. Meanwhile, there was Shanghai."

During the 1989 turmoil, Shanghai remained mostly peaceful. Then-Mayor Zhu Rongji went on radio after the army had cleared central Beijing of pro-democracy demonstrators, killing hundreds, perhaps thousands of them. He appealed for calm, offering students an enigmatic hope for redemption.

"Don't be impetuous," he cautioned. "History will show who was right or wrong."

Shanghai's relative tranquillity earned the gratitude of the rulers in Beijing.

In a speech published for the first time last year, Deng said "one of my biggest mistakes" was excluding Shanghai from the special economic zones set up in 1978 as part of his economic reform program.

Shanghai was belatedly added to the list in 1990. Since then, the central government has committed $40 billion, more than in any other city, to a public works program here.

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