For centuries, Shanghai was only a small fishing village. It didn't grow into a town until the 12th century. During the Tang Dynasty, the Shanghai area was incorporated into the county of Huating in A.D. 751. By the 12th century, Shanghai was a small market town (zhen). It benefited from its proximity to Hangzhou, the capital of the Southern Song Dynasty (1127-1279) and in 1292 it became a county seat (xian). 

By the early 1400s, Shanghai was considered important enough for Ming Dynasty engineers to be at work dredging the Huangpu River (also known as shen). In 1553, a city wall was built around what is today's Shanghai's Old Town (Nanshi) as a defense against the depradations of the Wokou (Japanese pirates). In 1603, Shanghai had its first contact with the Jesuits. By the end of the Ming Dynasty, in 1664, Shanghai had become a major cotton and textile center; and its population would soon reach 200,000.

During the late Qing Dynasty, Shanghai's economy began to rival that of the traditionally larger market at Suzhou. In the 18th and early 19th centuries, exports of cotton, silk, and fertilizer reached as far as Polynesia and Persia. In 1832, the British East India Company explored Shanghai and the Yangzi River as a potential trading center for tea, silk, and opium, but was rebuffed by local officials. The British then forced the Chinese to import British opium (which it produced in British India) by waging the First Opium War between 1839 and 1842. The British established their concession in 1845, the Americans in 1848 in Hongkou, north of Suzhou Creek, and the French set up their concession in 1849 west of the old Chinese city and south of the British Concession. In 1846, Peter Richards founded Richards' Hotel, the first western hotel in China. It would later become the Astor House. In 1850, the first English-language newspaper in Shanghai, the North China Herald, was launched. In 1853, Shanghai was occupied by a triad offshoot of the rebels called the Small Swords Society. 

By the late-1860s Shanghai's official governing body had been practically transferred from the individual concessions to the Shanghai Municipal Council. The International Settlement was wholly foreign-controlled with the British holding the largest number of seats on the Council and heading all the Municipal departments. No Chinese residing in the International Settlement were permitted to join the council until 1928.

By the mid-1880s, the Shanghai Municipal Council had a practical monopoly over a large part of the city's services. It bought up all the local gas-suppliers, electricity producers and water-companies. In the early 20th century, it took control over all non-private rickshaws and the Settlement tramways. It also regulated opium sales and prostitution until their banning in 1918 and 1920 respectively.

The 1911 Xinhai Revolution, spurred in part by actions against the native-owned railways around Shanghai, led to the establishment of the Republic of China. During that time, Shanghai became the focal point of many activities that would eventually shape modern China. In 1936, Shanghai was one of the largest cities in the world with 3,000,000 inhabitants. Of those, only 35,000 were foreigners, but these controlled half the city. 

During the Second Sino-Japanese War, the city fell after the 1937 Battle of Shanghai (known in China as the Battle of Songhu) and remained occupied until surrender of Japan in 1945. Under Japanese rule, the foreign concessions remained intact until December 1941. In 1945, Shanghai recoveried and hasn't been ruled by National Government until 1949. On May 27, 1949, Shanghai came under Communist control. Despite Communist claims that the city was taken over in a "peaceful" manner, one of the first actions taken by the Communist party was to clean up the portion of the population that were considered counter-revolutionaries.

In the 1990s and in the early 21st century Shaghai boomed. Its industries flourished and many new high rise buildings were erected. The population of Shanghai also rose rapidly as the city grew rich. Shanghai History Museum was founded in 1983. Oriental Pearl Tower was built in 1994 and Jin Mao Tower followed in 1999. 

Shanghai World Financial Centre was built in 2008. Meanwhile Shanghai Maglev Train opened in 2004. Then in 2010 the World Expo was held in Shanghai. Today Shanghai is a thriving city. It is also one of the largest cities in the world. Shanghai has a population of 23 million.

The Bund of Shanghai