How the Opium Wars Shaped Old Shanghai

In the 19th and 20th centuries, this fishing village transformed into a city of more than three million inhabitants. But capitalist speculation, drug trafficking, and bloody political struggles changed Shanghai's future forever.

The historic district located on the waterfront of the Huangpu River with a view of the Customs House and the 1937 Bank of China.
The historic district located on the waterfront of the Huangpu River with a view of the Customs House, which is topped by a clock reminiscent of London’s Big Ben (far left) and the 1937 Bank of China (far right).
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ByEditors of National Geographic
Published September 21, 2026

In 1842 the Treaty of Nanjing put an end to the First Opium War but forced China to open several “treaty ports,” which allowed European merchants to settle in Shanghai, then a fishing village not far from the mouth of the Yangtze River. British, French, American, and later Japanese settlers established themselves in enclaves known as concessions that were completely autonomous territories within the city.

Their arrival, along with refugees of the Taiping Rebellion and later Jewish refugees of World War II, marked the beginning of Shanghai’s transformation into a strategic commercial, financial, and industrial hub. Westerners remained a minority (150,000 in the early 1940s), but they left a deep mark on the city, especially in the Bund, its historic district located on the waterfront of the Huangpu River (pictured above).

Around the Customs House, which is topped by a clock reminiscent of London’s Big Ben (far left), stood a line of glittering skyscrapers. One such building was the 1937 Bank of China (far right), originally conceived to comprise 18 stories, yet whose designs were revised after complaints from Sir Victor Sassoon, architect of Sassoon House, later renamed the Peace Hotel (second from right).

Jazz Arrives in China

Foreign residents introduced nightclubs to Shanghai as places to drink and dance. After World War I, dozens of clubs opened, featuring musicians from Europe and the United States. The Chinese quickly got a taste for the new rhythms (jazz, foxtrot, and Charleston), as well as for the champagne and whiskey.

Couples dance in a promotional still for the film The Rich Man’s Daughter, shot in Shanghai in 1926.
Here, couples dance in a promotional still for the film The Rich Man’s Daughter, shot in Shanghai in 1926.
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Men who turned up at a club without a partner-—initially the majority—were attended to by hired “taxi dancers.” After each dance, the client would hand over a ticket bought at the entrance that the dancer would exchange for money.

It was said that in 1923, Suzanne Tsang, daughter of the Shanghai commissioner of reconstruction, caused a scandal among well-to-do Chinese families by appearing at a dance at the Carlton Café, but her example was soon followed by other women looking for fun.

(How China's youth culture is reshaping Shanghai)

Modern Women

An American journalist wrote in 1935 that “at first, Chinese girls shyly went to dances. Now they roam the city freely, smoke, drink and drive their own cars.” Women from the wealthier circles of Shanghai society soon adopted a Western lifestyle. Those pictured below show off their feet, as if to emphasize their freedom from the traditional practice of foot-binding.

Modern women in Old Shanghai.
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Some women also began to cut their hair short, breaking a moral principle of filial piety enshrined in Confucianism. In the 1920s, the figure-hugging qipao appeared, quickly becoming ubiquitous. These dresses ranged from wider, more conservative options to daring designs with a long slit that revealed the legs, as can be seen in the portrait of a legendary actress of the time, Ruan Lingyu.

Portrait photo of legendary actress of the time, Ruan Lingyu.
Legendary actress Ruan Lingyu.
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International Opium Capital

During the 19th century, European banks established in Shanghai made a fortune from opium. Through the Opium Wars, the British had forced China to legalize the drug trade for their own gain. Tons of opium arrived at the city’s port for distribution, and consumption of “black rice,” as it was called, was rife. One late 19th-century guidebook captures both the threat and the allure of the situation: “The poison of opium has circulated in China for a long time from the literati to the porters; there is almost no one left untouched,” it warns, while noting that “Shanghai’s opium halls are the best under heaven.”

A postcard image of opium smokers, undoubtedly posed.
This image of opium smokers is undoubtedly posed, typical of the postcards made for curious Western eyes at the time.
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In 1918 the Shanghai authorities banned the trafficking of opium and its increasingly popular derivatives such as morphine and heroin. But the local mafia, the Green Gang (led by Du Yuesheng the “Opium King”), continued to operate with complete freedom in the French-controlled part of the city. Opium and addiction only broadened the wealth gap between the labor class, China’s upper class, and foreign elites. Later under the Japanese occupation, trade was once again revived. It continued until Japan’s defeat in 1945, the establishment of the Republic in 1949, and the successful drug suppression campaign of the following decades.

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War Comes Knocking

Shanghai’s economic boom was accompanied by mass inequality and growing social and political tensions. On May 30, 1925, British municipal police opened fire on Chinese protesters, sparking a widespread labor and anti-imperialist movement. Two political forces were gathering strength: the right-wing, nationalist Kuomintang and the Chinese Communist Party, founded in Shanghai in 1921. Tensions boiled over in 1927 after the Kuomintang army defeated Sun Chuanfang, the warlord who had ruled Shanghai, and took control of the city.

French tanks patrol the streets of Shanghai.
French tanks patrol the streets of Shanghai during the civil war in May 1927.
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Fearing an attack on the International Settlement and French Concession, the British, French, American, and Japanese sent military reinforcements. But rather than attack Westerners, the leader of the Kuomintang, Chiang Kai-shek (together with the Green Gang mafia), began a bloody campaign against the Communists and their perceived sympathizers, who were massacred by the thousands. This would mark the beginning of the Chinese Civil War.

This story appeared in the September/October 2026 issue of National Geographic History magazine.