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World War II: China—Shanghai

1 January, 1900

Shanghai was China''s principal port and its location close to the capital of Peking made it strategically the most important city in China. The war for Shanghai began about 10 years before the Japanese attack on Pearl Harbor. The first Japanese attack occurred after the seizure of Manchuria (1932). As a result the Chinese were forced to accede demilitarization of the city. The Japanese air force bombed Shanghai giving the excuse that Japanese residents were endangered. Press reports and wire photos of the devastated city and civilians appeared in newspapers around the world. This profoundly affected the Japanese image both in Europe and more importantly the United States. Thousands of Jews fleeing NAZI persecution found refuge in the city. The first major battle of the Second Sino-Japanese War (The China Incident) was fought over Shanghai (1937). The Japanese were shocked that the Chinese were able to put up such an effective defense. Frustration over the losses suffered were a factor in the subsequent Rape of Nanking. The Japanese seized the International Settlement as part of the Pearl Harbor offensive (1941). The Japanese wanted to turn Shanghai into an open city, but the Allies planning to build up air forces in China, refused. The Japanese interned civilians from Allied countries (1943). 

The City

Shanghai located on the Hwangpu River was China''s principal port and business capital. Its location close to the capital of Peking made it strategically the most important city in China. And of course it was a port providing access to not only the capital, but northern China in general. It was important before the creation of the International Settlement and only grew in importance as the city and International Settlement subsequently expanded. It became known as the "Paris of the East". "It was a financial powerhouse and thus of great interest to China, but also to foreign countries seeing to do business in China, or in the case of Japan to dominate China 


Shanghai was in part the financial and business capital of China because the European countries were so involved in the city. European powers during the 19th century secured Treaty Ports which they governed and their citizens had extra-territorial rights. The Shanghai International Settlement was organized as foreign powers were expanding business activities in China (1854). The British were the primary foreign group active in Shanghai, but other foreign businessmen were also active. These businessmen organized a united municipal council--the Shanghai Municipal Council (SMC). The SMC assumed responsibility for the concessions the Chinese Government had granted to the British, French and Americans. The French decided to withdraw from the SMC (1862). The British and Americans decided to formally unite their concessions and this became known as the Shanghai International Settlement (SIS). We note some of the families involved. One is an American family-- the Webbs. Western businessmen and diplomats lived and operated in Shanghai a world apart from the rest of China. Other foreign countries negotiated treaty relations with China. Their businessmen became part of the SIS administration of the settlement, but the SIS continued to be a primarily British-dominated undertaking. Unlike other British treaty ports (Hong Kong and Weiheiwei) which became actual British colonies, the SIS was different. Legally it was Chinese sovereign territory. The SIS set up its own police force--the Shanghai Municipal Police (SMP). There was also a small military contingent--the Shanghai Volunteer Corps (SVC). After disturbances in the British concession in Hankow (1927). the British reinforced the SVC by bringing in a battalion of the British Army which was named the Shanghai Defense Force (SDF). 

Chinese in the SIS

The initial plan for the SIS was to exclude the Chinese. This did not prove practical because the foreigners wanted to hire Chinese as both family servants and workers. Thus large numbers of Chinese were granted residency in the SIS. And the SIS attracted the Chinese both because it was a refuge from the civil strife which was sweeping China and because there were not only well paying jobs, but business opportunities. More than 1 million Chinese lived in the SIS (1932). The Chinese thus were the great bulk of the population. And another 0.4 million Chinese fled into the SIS when the Japanese invaded China (1937). 

City Divisions

Shanghai expanded as it grew economically. The International Settlement (SIS) came to be divided as the Japanese population in Hongkew grew. Hongkew was within the SIS, but after the seizure of Manchuria and the rise of anti-Japanese feeling, responsibility for security in Hongkew was assumed by Japanese naval troops, there was also the separate French area. In addition there was also the "Outside Roads" (越界筑路). This was Chinese territories were controlled and administrated by SIS authorities. 


Japan in its rapid industrialization encountered major difficulties. Japan had insufficient natural resources for its expanding industry. China located near Japan, across the Yellow Sea, offered a solution to Japan''s industrial problems." China located near Japan, across the Yellow Sea, seemed to many Japanese to offer a solution to Japan''s industrial problems." China not only had natural resources, but its huge population was a potential market for the expanding output of Japanese factories. Thus Japan participated in the European effort to establish treaty ports in China. Japan acquired the German Treaty port of Tsingtao during World War I. Shanghai was, however, the most important port and business center. Large numbers of Japanese companies were doing business in China and had offices in Shanghai. Japan during the 1920s became the most important foreign group in Shanghai. The SIS with the influx of Japanese came to represent an estimated 80 percent of all the extraterritorial foreigners in China. The Japanese gravitated to the Hongkew district of Shanghai. It became the the unofficial Japanese area of Shanghai, often referred to as Little Tokyo. The Japanese seizure of Manchuria (1931) resulted in an outburst of anti-Japanese sentiment throughout China. The protection of Hongkew became a major Japanese concern. Attacks on Japanese citizens in China were used to justify a Japanese buildup and attack on Shanghai--the Shanghai Incident (1932). The Japanese forces deployed to Shanghai took over the protection of Hongkew from the SMP< This was sone by both the Japanese military and the Japanese Consular Police. 

Manchuria (1931)

The Japanese Kwantung Army occupied Manchuria, a Chinese province, using as a pretext a faked incident on the main railroad (1931). Japan then declared "Manchukuo" an independent state, setting up Pu Yi, the last Manchu Emperor of China as puppet Emperor (1932). Japan withdrew from the League of Nations as a result of the international criticism of her military operations in Manchuria and China (1933). The Japanese encouraged Japanese "colonizers" to emigrate to Manchukuo, but few responded to the propaganda films depicting an Asian paradise. For the Chinese in Manchukuo, life became increasingly difficult. Manchuria was part of China, but Chiang Kai-shek who led the Nationalist Kuomingtung Party (KMT), realizing that the Nationalist Army was not capable of dislodging the Japanese, did not confront them militarily. 

Japanese Attack on Shanghai (January 1932)

While the Chinese Nationalist KMT Army did not intervene in Manchuria, the Chinese people were outraged at the Japanese. The Japanese were increasingly resented in China and the seizure of Manchuria was only confirmation of what the Chinese already widely suspected. There were demonstrations and protests throughout China. Anti-Japanese disturbances broke out in Shanghai. And there were attacks on Japanese citizens. The Imperial Japanese Army (IJA) used these attacks and other instances of resistance to justify a military action in Shanghai. The Japanese attacked Shanghai in what they called the Shanghai Incident (January 1932). the Japanese air force bombed Shanghai to quell the disturbances. They claimed that Japanese residents were endangered. The city had no air defense or bomb shelters. There was no effort to hit military targets. This was the first of many Japanese terror bombings of civilian populations. The Japanese when they attacked Shanghai avoided hitting the International Settlement. Chinese fleeing the fighting attempted to get into the International sector. It had to closed off as supplies did not exist to provide for the refugees. Groups in America provided some relief aid. Press reports and wire photos of the devastated city and civilians appeared in newspapers around the world. This profoundly affected the Japanese image both in Europe and more importantly the United States. The International Settlement in the 1930s found itself in the middle of the bloody battle between the Nationalists and the Japanese. The Nationalists were out gunned by the Japanese who were supported by Japanese naval vessels in the harbor. They put up a fight for the city. Only the SIS remained untouched. Eventually a ceasefire was negotiated. This resulted in the demilitarization of Shanghai. The Chinese KMT was prohibited from deploying troops in the city, but could have a police force. The Japanese were allowed a small force of Marines. 

The Holocaust

Shanghai played a unique role in the Holocaust. After the NAZI take over in Germany, Jews began emigrating escape persecution. The problem faced by many Jews was that many countries refused to offer visas to Jews. Shanghai had no passport requirements and thus offered haven, although a very distant one. Unlike their other Axis allies, the NAZIs could not force or convince the Japanese that the Jews were a mortal danger. The Japanese did not understand the NAZI obsession with the Jews. Shanghai as a result proved to be a refuge for Jews, even after the War began. This was in part due to the the work of a British businessman--Sir Victor Sassoon (1881- ). He came from a Sephardi Jewish family which settled in Baghdad. His great-grandfather, abandoned the Middle East in favor of London, and three generations later, Victor was thoroughly British and a member of a family with far-flung interests within the Empire. There were branch offices in Bombay and Shanghai. He proved himself a brilliant business man. He was severely crippled during World War I in Royal Flying Corps. He transferred his interests from restive Bombay to Shanghai. He was a major force in the growth of Shanghai during the 1920s. Shanghai for example built the tallest buildings outside the United States. Sir Victor set out to do what he could to rescue European Jews. It was not easy for European Jews to reach Shanghai, but thousands did. Sir Victor Sassoon was assisted by several other wealthy Shanghai Jews, such as Ellis Hayim and Horace Kadoorie. Most Jews arrived in Shanghai destitute. The NAZIs at first allowed Jews to leave Germany, but first stripped them of their property. They set up soup kitchens and schools. Sir Victor donated Embankment House to provide shelter. He also gave money for such projects as milk for the children and medical care.

Battle for Shanghai (August-November 1937)

Nationalist soldiers resisted the Japanese at the Marco Polo Bridge. They were not acting on Chiang Kai-shek who favored a moderate approach to the Japanese. Chiang and the KMT did not have full control over field commanders. The IJA launched, however, a major response which would become a full invasion of China proper-the Second Sino-Japanese war. The Japanese seized Peking (July 29, 1937). Shanghai was China''s principal port and its location close to the capital of Peking made it strategically the most important city in China. The war for Shanghai began about 10 years before the Japanese attack on Pearl Harbor. The importance of Shanghai meant that it would be the scene of major combat. Chiang who refused to commit the Nationalist Army to defend Manchuria, realized that he could not refuse to resist an invasion of China proper and maintain his position. He thus ordered the Nationalist forces to resist. Chang had been preparing for just such an attack. He had been training men under the disguise of police training. The Chinese were preparing defensive lines between Nanking and Shanghai with German military assistance. A junior Japanese officer, First Lieutenant Isao Oyama of the Japanese Naval Special Landing Forces, attempted to take control of Hungchiao Airport (August 9). This was a violation of the ceasefire after the 1932 battle. Chinese policemen resisted the Japanese and killed Oyama. The Japanese consul general in Shanghai apologized for Oyama''s action, but demanded the Chinese police force, the Peace Preservation Corps, to disarm. Japanese troops were moving toward Shanghai as part of the already planned seizure of Shanghai and were using the Oyama incident as a pretext. Chiang also broke the ceasefire agreement by moving troops into Shanghai (August 11). He committed the 87th and 88th divisions, two of the best in his army, to seize and hold Shanghai. Both had been trained by German officers. The battle for Shanghai became the first battle of the War. The struggle for Shanghai, called the Battle of Songhu by the Chinese, would be the first of 22 battles in the Second Sino-Japanese War. The Japanese for diplomatic reasons did not want to refer to it as a war and instead referred to it as the China Incident. The small and poorly trained Chinese Air Force attempted to support the soldiers defending Shanghai. They attacked Japanese ships in the Shanghai harbor (August 13, 1937). They targeted the light cruiser Idzumo. As a crowd of civilians cheered, bombs missed the cruiser and fell on the Palace Hotel and in the street full of civilians. The carnage became known as "Bloody Saturday". They put up a major fight for the city which lasted 3 months. Whole districts of Shanghai were destroyed in the fighting. The Japanese mobilized over 200,000 troops supported by naval vessels and aircraft to seize Shanghai. . The Japanese bombed the city which had no air defenses. [Jing-hui, pp. 109-11] There are reports that the Japanese Army used chemical weapons in the battle for Shanghai. They eventually drove the Chinese out, but were shocked at the intensity of the Chinese fighting and the scale of their own losses. The Japanese victory was in part as a result of naval artillery fire and aerial bombing. Chiang eventually was forced to order a fighting withdrawal into the interior. The Japanese army marched into the city, seizing assets and carting away anything of value. They conducted wide spread attacks on Chinese civilians when the army entered the city. The stubborn fighting in Shanghai was one reason the Japanese acted so brutally when they took Nanking. The Japanese respected the European enclaves. 

Japanese Strategy

The Japanese General Staff after seizing Peking, Shanghai, and Nanking believed that had won the war. There was at the beginning of 1938 a hope that the scope of the conflict could be limited to northern China and Chiang and the KMT would be forced to come to terms. At the time, the Japanese Army was still thinking in terms of a showdown with the Soviet Union. This would become known as the Strike North faction. They thought that their victories would secure their southern flank and wanted to begin concentrating forces for a war in the north with the Soviets. Similar to what occurred in Manchuria, the Japanese government and General Staff lost effective control over field commanders in China. Field commanders with impressive victories to their credit wanted to finish the job. They continued to attack the Nationalists and out of reckless attacks suffered a rare defeat at Taierzhuang. This forced the IJA had to revise strategy. The IJA was forced to deploy almost its entire combat force in China as part of the attack on Hanhkow (Wuhan), which after the fall of Nanking became the principal Nationalist stronghold. The Japanese believed this would finally force the KMT to come to terms. [Huang, p.168.] The Japanese did take Wuhan, but the Chinese simply moved further into the interior. And when the Japanese subsequently attacked the United States, they would fight the Pacific War with most of the IJA in China. 

Seizure of the International Settlement (December 1941)

The British withdrew their garrison from the International Settlement (August 1940). The U.S. Marine contingent was evacuated (November 28, 1941). As part of their offensive begun at Pearl Harbor, the Japanese seized the SIS (December 8, 1941). The cruiser Izumo began hostilities by capturing the American gunboat USS Wake and the British gunboat HMS Petrel. Japanese soldiers stormed into the SIS. There was no resistance. Only the separate French sector was respected. The French Vichy Government was occupied by the Germans, an Axis Ally, and thus not targeted by the Japanese. The British and Dutch were already at war with Germany. Pearl Harbor brought America into the War. The civilians of the Allied nations (primarily British) were no allowed to continue working or to frequent places of entertainment like movie theaters. They has to wear a numbered red arm-band with a letter code indicating their nationality so they could be easily identified. A Chinese tailor was contract to supply the British with clothing, which was a corduroy lumber jacket and trousers in two shades! So the British soon were all dressed alike. The Chinese underground actively shot Japanese soldiers so Japanese set up street barricades all over the city. [Shaw] 

World War II

Japan during the War wanted to declare Shanghai an "open city" (1942). Shanghai as the business capital of China and major port was extremely important in Japan''s efforts to exploit China to support the war effort. Shanghai by 1942 was deep within Japanese controlled territory. Attacking America, however, changed the dynamic of Japan''s war in China. America had begun to support the Nationalist with the Flying Tigers at the time of Pearl Harbor. This was a relatively small group of American fighters, designed primarily to protect the Burma Road and Chungking from Japanese bombers. After Pearl Harbor, the United States significantly expanded the air war in China. Until this the Japanese exercised almost total air superiority. American air power operating from China brought the supplies stored in Shanghai and the port within range of American bombers. By declaring Shanghai an open city, the Japanese hoped to continue using the port and store war materials and supplies as well as raw materials for Japanese factories without fear of Allied air raids. The British and American refused to accept the Japanese proposal. 

Internment (1943)

The Japanese after seizing the SIS (December 1941) did not proceed to round up Allied citizens. Most of the individuals involved were British. Japanese authorities ordered the British and American adults to register. They had to register their factories, warehouses, bank accounts and real estate. Soon the Japanese froze or confiscated these assets. A few civilians were exchanged with the United States (beginning March 1 1942). The Japanese ordered "hostile citizens" to wear red armbands. This means citizens of countries at war with Japan (October 1, 1942). This was apparently necessary to distinguish the Europeans as the Germans and Italians wee allies and the French were neutral. Letters were added to the armbands to designate nationality ("A" for America, "B" for Britain, "N" for Netherlands, and "X" for others). These "hostile citizen" were prohibited from frequenting city entertainment sites, including theaters, cinemas, bars, clubs and bars (October 15, 1942). Subsequently authorities in the French Settlement also forbade American and British citizens to frequent parks and theaters. The Japanese next seized the property of the hostile citizens, including radios, cameras, furniture, fans, and stoves (November 13, 1942). The Japanese added citizens of other countries to the hostile list as more countries declared war on Japan: Australia, Belgium, Canada, Costa Rica, Cuba, Dominica, Guatemala, Haiti, Honduras, the Netherlands, New Zealand, Nicaragua, Panama, and South Africa. This was a little confusing as several countries which declared war were not added to the list, including Brazil, Columbia, Greece, Iran, Iraq, Greece, and Mexico. Brazil had a substantial Japanese population. Very small numbers of people were involved in Shanghai from these different countries. The Japanese finally began to roundup and intern (February 15, 1943). 

Treaty Terms

The SIS was legally terminated during the War. The British and Americans formally relinquished their rights to the SIS in a new treaty with Chiang Kai-shek''s Nationalist government in Chunking (1943). Shanghai at the time was still occupied by the Japanese. 


Heppner, Ernest G. Shanghai Refuge: A Memoir of the World War II Jewish Ghetto.

Huang, Ray. Chiang Kai-shek Diary from a Macro History Perspective (1994), p.168

Jing-hui, Fu. An Introduction of Chinese and Foreign History of War (2003).

Shaw, Norman Douglas. "Life in Occupied Shanghai - 1941" WW2 People''s War (BBC: April 18, 2005).