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.

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.

In Shanghai, Deng’s 1978 slight seems to have been long forgotten, if not forgiven. Xu, expected to be named the mayor when the National People’s Congress meets next year, speaks with pride of his city’s dizzying growth, comparing it to the rise of the great American cities in the late 19th Century.

“Shanghai is much like the United States, I think,” said Xu, slipping into the facile English he perfected as an engineer working in Sweden. “It is an emerging city. One hundred years ago, Shanghai had only a 30,000 population. Now it has more than 13 million.”

With an engaging smile and salesman’s enthusiasm, the balding Xu launched into a list of Shanghai’s modern industrial milestones.

“All the modern industries started in Shanghai . . . the Long March Rocket (China’s powerful satellite launching rocket) was designed and manufactured in Shanghai . . . the first Chinese wristwatch was a Shanghai watch . . . the first passenger car . . . the first big ship of 10,000 tons was made in Shanghai . . . the first submarine.”

The key to Shanghai’s success, Xu said, is its unique combination of “Chinese traditional culture and Western culture.” Only 20 years ago, during the Great Proletarian Cultural Revolution, such talk would have been considered blasphemy. The ruling Maoists had rejected Western ways and launched campaigns to destroy outsiders’ icons.

Today, however, Shanghai proudly celebrates itself as the most Western of Chinese cities.

Xu, 57, was interviewed in the reception room at City Hall. The stately building in the riverfront Bund district features marble Ionic columns and mosaic tile floors. It was once the main office of the Hong Kong & Shanghai Bank, bastion of British imperialist finance.

In a historic reversion that says much about the Chinese economic transformation, it was recently repurchased by the original owners, now based in Hong Kong, and will be reopened as the bank’s Shanghai office.

Much of the historic Shanghai Bund, in fact, is for sale. And the Communist municipal offices are moving to new buildings elsewhere in the city.

Located on the west bank of the Huangpu River, the Bund remains one of Shanghai’s most vibrant and expensive areas. Nanjing Road, the glitzy shopping street that leads to the Bund, becomes a blaze of neon at nightfall.

On a narrow street around the corner from City Hall is a karaoke bar catering to foreign tourists and a newly opened beer hall that brews its own boutique beer in copper kettles. One store features the latest in multimedia computers. Another offers handmade violins.

Given a choice, despite the inconvenience of getting there though the horrendous traffic, most Shanghai natives would choose to live in this exciting district if they could afford the skyrocketing rents.

The standard joke in Shanghai is “Better a bed in Puxi”--the western bank of the Huangpu, including the Bund--”than a house in Pudong,” on the other side of the river.

But Pudong, formerly the vegetable garden for Shanghai, is where the municipal government has pinned its hopes for the future. To entice foreign investment and development, the government created a master development plan with wide roads and industrial parks.

In a flurry of infrastructure building, the Shanghai government has erected two of the world’s largest steel cable bridges, two tunnels and a new subway line, all since 1985, to connect Pudong with the old city center. Twenty ferry boats also travel between Puxi and Pudong.

For the massive construction needed in Pudong, the city government imported 2 million workers from interior provinces. The way in which Shanghai imported the labor is one of the city’s main success stories and another reason it won the heart of the central government.

City officials traveled inland where they created companies to recruit construction workers on a limited contract basis. The workers were guaranteed housing and medical care and were issued “blue work cards” giving them permission to come to Shanghai for a limited time until their construction projects ended.

The “blue card” system helped Shanghai avoid the massive influx of migrant laborers that has plagued Beijing and Guangzhou. Beijing is estimated to have 1.6 million such workers; Guangzhou, more than 2 million. But unlike Shanghai, neither city has a method of regulating the migrant population, which many fear will become the nucleus of social unrest.

So far, more than $8 billion has been invested in Pudong, including in major projects by the American chemical giant DuPont and the Japanese electronics firm Sharp.

In one of the buildings in the Shanghai Lingqiao (Golden Bridge) Export Processing Zone in Pudong, a large-scale model is on display for senior officials and foreign guests.

The model, on a hydraulic pedestal surrounded by a stainless steel railing, shows Pudong as Shanghai officials dream it will become--an ultramodern community with parks and villas next to pollution-free industrial parks. Tiny ducks swim in limpid blue ponds.

On the walls of the frigidly air-conditioned model room, decorated in subtle grays and blues, are pictures of China’s senior leaders. The calligraphy of Deng himself (“Pudong Development Area Offers Great Hope”) is on one wall.

Outside, Pudong is still a dusty, polluted development zone bearing little similarity to the idealized model. But ever the optimist and consummate salesman for Shanghai, Xu advises visitors not to be put off by the dust and the grit.

“Pudong is still under construction,” the deputy mayor said. “Around construction it is always very dirty, with a lot of dust.

“After all,” he said with a contagious smile, “if everything is very quiet and clean, it means it is not developed.”