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Shanghai rising!

By Frederik Balfour, BusinessWeek
February 12, 2007 17:14 IST
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Benjamin Wood swings his bulky frame over the saddle, straps on his helmet, and settles onto a vintage motorcycle with sidecar. The American architect kicks the engine into life with a single thrust and pulls into the rush-hour traffic coursing through Shanghai's trendy Xintiandi district. He soon steers down a narrow street and enters another world.

While Xintiandi is all luxury shops and outdoor cafés, in surrounding neighborhoods the sidewalks are full of people playing mah-jongg in their pajamas, washing dishes at outdoor taps, or popping dumplings into bubbling oil. Life goes on much as it has for the past half-century.

As the bike gathers speed, Wood's white silk jacket flaps in the wind. Passing between some of the fast-disappearing courtyard houses of Shanghai, he waves at locals making dinner. "They know me pretty well in this neighborhood, because I like to ride through here a lot," he says, raising his voice to be heard over the growling motor. "What they don't know," he adds with a hint of regret, "is that I'm also the guy who is going to make this way of life disappear."

Although few might recognize Wood, virtually anyone who has spent more than a day or two in Shanghai will know Xintiandi. The rebuilt neighborhood is Wood's first and best-known work in China, a collage of cobblestone streets, narrow alleyways, and graceful tiled roofs. Xintiandi, which translates as "New Heaven and Earth," has become one of Shanghai's top tourist destinations. Foreigners love it because it evokes the colonial era and is one of the few neighborhoods to escape the wrecker's ball, while locals are drawn to the bistros, bars, and boutiques that lend it a Western cachet.

Wood's work at Xintiandi has become a symbol of the changing aspirations China has for Shanghai. In 1992, Deng Xiaoping declared that Shanghai would be "the head of the dragon" pulling the country into the future, and the Chinese have poured tens of billions of dollars into rebuilding the city after a half-century of neglect. The pace has slackened after a a scandal over municipal pension money spent on questionable real estate deals, but the city is still booming.

Problem is, Shanghai has long preferred megaprojects that blindly ape the kind of high-rise developments that scream "modernity" but have little to do with traditional Chinese culture. Until Ben Wood, that is. Xintiandi represents Wood's signature style: Instead of calling in the bulldozers, he imagines a rundown neighborhood as something refreshed. He refurbishes old buildings, saves the facades of others while gutting their interiors, and designs new structures that blend in.

That graceful melding of old and new fits Shanghai's ambitions as it steams toward its third decade of hypergrowth. Like Renaissance Florence, London in the 1800s, or New York early in the 20th century, Shanghai aims to muscle its way into a top spot in the global economic order-a role it played back in the 1920s. Today, Shanghai is the mainland's most populous city, with 18 million residents. It's home to the Asia headquarters of more than 150 global corporations, including General Motors, IBM, and Alcatel-Lucent.

And multinationals are boosting their commitment. GM today employs some 1,800 white-collar workers in the city, 60% more than in 2004, while Citibank now has 2,000 employees there, up from 80 in 1999. "Shanghai has very visible ambitions to be a major financial center in the region and perhaps beyond," says Richard Stanley, CEO of Citigroup China.

Expatriates love Shanghai's nightlife, while skilled young Chinese and migrant laborers have rushed to cash in on the city's surging economy. Shanghai is growing at 12%-even faster than the 10.7% expansion that China as a whole saw in 2006-and the city's gross domestic product was $136 billion last year.

That's less than half of London's, but Shanghai's growth is three times as fast the British capital's. And Shanghai has attracted some $120 billion in foreign direct investment since 1992, including commitments of $14.6 billion last year, or 23% of China's total fdi for 2006. "You are witnessing the greatest transformation of a piece of earth in history. It's mind-boggling," says Greg Yager, vice-president of Baltimore design firm RTKL Associates, which has done planning work in the city.

The opportunities in Shanghai have attracted scores of foreign architects, who have helped craft one of the world's most extraordinary skylines. In the financial district of Pudong, which until two decades ago was little more than rice paddies and small factories, the 88-story Jin Mao Tower (designed by Chicago's Skidmore, Owings & Merrill) is home to GM, Credit Lyonnais, and IBM. Next door, the 101-story Shanghai World Financial Center (from New York's Kohn Pederson Fox Associates)-originally planned as the world's tallest building, but now eclipsed by Taiwan's Taipei 101-is about three-quarters completed.

Across the Huangpu River, the 66-story Plaza 66 (by Atlanta-based John Portman & Associates) houses General Electric, BP, and KPMG. And the once-dilapidated Bund, the erstwhile Wall Street of Asia on the riverfront, has been re-energized with packed nightclubs, tony boutiques, and trendy restaurants.

"Shanghai is a dynamic, exciting, increasingly multicultural city," says Robert Pallash, president for Asia at auto-parts maker Visteon Corp., which moved its regional headquarters to Shanghai from Japan in 2003. One reason the city won out over Bangkok, Hong Kong, and Singapore: It's an easier sell for expats. "It's very important to attract people from the global organization," Pallash says.

Attracting locals is equally important. The legions of migrants flocking to Shanghai are filling Visteon's factories, as well as those of Intel, Philips, Honeywell, and scores of other multinationals. And the city's universities are churning out thousands of engineering grads every year, which provides a steady supply of researchers for labs run by corporations from around the world.

At its facility in Zizhu Science Park, 18 miles southwest of the center, Intel Corp. now employs 1,000 people, up from about 40 in 2000. A decade ago, "it was difficult to find a high-quality office building," and qualified workers were scarce, says Wang Wen-hann, general manager of the lab. Today, "all these factors have matured," he says.

Overstretched infrastructure

In neighborhood after neighborhood, though, eight-lane expressways and steel-and-glass behemoths crowd out gracious townhouses and tenements dating to the early 20th century. The city has doubled its housing stock over the past two decades, but most of those new homes are in soulless skyscrapers.

And many of Pudong's towers stand alongside the 100-yard-wide Century Avenue, a thoroughfare that's nearly impossible to cross and lacks so much as a kiosk selling newspapers, let alone a sidewalk café. The district represents "a failure to create a livable urban environment," says Tom Doctoroff, the chief executive for Greater China at ad agency JWT Co.

That's a problem for a place with mega-ambitions. If companies find that Shanghai has become too pricey or too congested for the kinds of employees they want to attract, it may quickly fall from the global hot list. Top-quality office space today costs more than in Midtown Manhattan, and expatriates typically pay $5,000 to $10,000 or even more in monthly rent. The air can be unbreathable, and the highways are clogged much of the day. "

You have a city whose infrastructure is totally stretched," says Steve Mullinjer, managing partner at executive search firm Heidrick & Struggles in Shanghai. "It's like a wild horse...with no way to rein it in."

Controlling that runaway horse is Job One in Shanghai, and how Shanghai grapples with that issue is important for all of China. Hundreds of millions of migrants are likely to move to the mainland's cities in coming decades, and much of the rest of the country looks to the city for cues. So if Shanghai bulldozes its history to build highways, you can bet that many other cities will follow suit.

Since 2000 the number of cars on the mainland has tripled, and Shanghai and Beijing are already ringed with single-family homes and new communities accessible only by car. With 1.3 billion people, the mainland can ill afford the kind of suburban culture that many seem to want.

"The government is now more aware of quality-of-life issues," says Daniel Vasella, chairman of pharmaceutical giant Novartis and head of the International Business Leaders Advisory Council for the Mayor of Shanghai. "They realize that if you can't deliver [a good standard of living], people won't want to live there."

Perhaps that's why the Chinese have taken so readily to Ben Wood. The 59-year-old architect, whose white beard and ruddy complexion make him seem more like a good ol' boy from his native Georgia than a hotshot designer, was drawn to Shanghai's street life and the crowded tenements known as shikumen. These two-story buildings, a mélange of Chinese and Western styles with carved stone details, had remained largely untouched since the Communists took over in 1949. But when Wood arrived in Shanghai in 1998 to design Xintiandi, they were rapidly being razed.

At the Xintiandi site, Wood suggested saving the structures and creating a walking district that would preserve the sense of community of old Shanghai. That was a revelation to the city fathers, who until then had struggled to find an alternate way of expressing Shanghai's newfound confidence and affluence.

Having proved it can replicate the West in districts such as Pudong, the city was looking for a second wave of development that wouldn't just import styles wholesale, but could give shape to its aspirations as a world-class metropolis. Wood "understands the relationship between new and old buildings," says Wu Jiang, deputy director of the Shanghai Urban Planning Bureau.

If Wood has been good for Shanghai, Shanghai has been equally good to Wood. He kept a relatively low profile in the U.S., but in China he's a true star. Xintiandi's success has spawned countless imitators on the mainland, and Wood has received more than a dozen major commissions. Today he runs a studio of 30 draftsmen and designers, and inquiries from prospective clients roll in almost daily.

He is working on a mountain resort, a development similar to Xintiandi in the western city of Chongqing, and another in Hangzhou, a lakeside city 120 miles southwest of Shanghai. Wood "is totally different from other foreigners practicing in China," says Ma Qingyun, a Shanghai architect and now dean of the School of Architecture at the University of Southern California. "He is quite into the human side."

Tricky political landscape

To keep Shanghai's growth from tearing apart its urban fabric, the city is building nine new communities on the periphery that are expected to house a total of a million or more newcomers by 2020. These projects, called "One City, Nine Towns," were planned as self-sufficient satellite cities where residents can live, work, and shop, without having to travel into central Shanghai.

Each was also designed thematically to resemble the cities of other countries or cultures-a notion some dismiss as frivolous. In Fencheng, for instance, a Spanish group is creating streetscapes inspired by Barcelona's Ramblas promenade.

Albert Speer, son of Hitler's favorite architect, is the brains behind Anting, a community modeled after small cities in Germany and home to the Shanghai Formula One circuit as well as Volkwagen's joint-venture auto factory. And Thames Town looks like an English village with cobblestone streets, half-timbered Tudor buidings, red telephone boxes, and a statue of Sir Winston Churchill. "It's farcical," Wood says. "Why pretend you are living in some fantasy land?"

Wood's contribution to the nine towns effort is less garish. In Qingpu, on the southwestern edge of Shanghai, he is working on an 830-unit residential complex that draws its inspiration from the area's ancient canals, bridges, and walkways. His aim, he says, is to create buildings on a human scale that relate to their environs. "The biggest problem in China is that the Forbidden City is burned into every brain," says Wood. "It's symmetrical, monumental, and out of scale."

China's modern-day mandarins can be equally intrusive. In 2004, Rockefeller Group International, the New York-based property development arm of Mitsubishi, hired Wood to plan a 30-acre site the developers call Rock Bund. The project will incorporate a 1928 art deco theater and more than two dozen colonial-era buildings. Rockefeller seemed to have everything going for it, including the support of Shanghai Communist Party Secretary Chen Liangyu.

But in a city changing as rapidly as Shanghai, you never quite know when you might end up building on political quicksand. Last September, Rockefeller executives got a disturbing call from their lawyer, saying, "Our friend is in the slammer."

The friend was Wu Minglie, the chairman of New Huangpu Group, a Chinese company that was working with Rockefeller. He had been detained and accused of misappropriating city pension funds for property development. Shortly thereafter Secretary Chen was sacked in what many believe was a power struggle with China's central leadership in Beijing. Rockefeller Group executives declined to comment on the record about the affair, which a company spokesperson calls "extremely delicate." Though most projects have been delayed since Chen's ouster, there's no indication that Rock Bund is in danger of being scuttled.

Despite the headaches, Wood isn't one to shrink from a challenge. A latecomer to architecture, he didn't start practicing until he was 36. By that time he had flown fighter jets with the U.S. Air Force and founded a mountaineering school and a French restaurant in Colorado. At 31, he enrolled in a graduate architecture program at the Massachusetts Institute of Technology. He soon started his own firm with Ecuadoran Carlos Zapata and broke into the big leagues in 1998 with a commission to rebuild Soldier Field, the Chicago Bears' stadium.

When Wood was in the middle of the Soldier Field project, he got a call from Hong Kong. Would he pick up a business-class ticket waiting for him at the airport and come ASAP? Two days later, Wood was being whisked by limo to the offices of Vincent Lo, chairman of property group Shui-On. The meeting lasted five minutes. "He told me, I want you on the next plane to Shanghai and back here tomorrow morning,'" Wood recalls.

After a few hours wandering the dilapidated neighborhoods that would become Xintiandi, Wood returned to Hong Kong to make his pitch. He cited Boston's Faneuil Hall Marketplace and mountain villages in Italy as potential models. As luck would have it, Lo was a fan of the Boston development and had spent time in Tuscany.

"After half an hour, I said, This is the man I want to work with,'" says Lo, who gave Wood the job over three competing architects. Within six months, some 1,600 families had been relocated to new developments far from their old homes-not always happily, despite having indoor plumbing and their own kitchens for the first time. "We did things like take off their roofs to speed up the process," Wood says.

The irony of Xintiandi's success is that surrounding blocks have been bulldozed for luxury developments, spelling the end of the local charm that attracted Wood in the first place. Lo now wants to turn adjacent property into a theater district that will rival Broadway or London's West End. Although a few handsome brick buildings will be saved, the expanded site will also include four theaters, a 68-story office tower and high-end apartments. The outdoor dining, meanwhile, won't be at dumpling stands, but at upscale restaurants. "The real tragedy is not the disappearance of the [old buildings], but of life on the streets," Wood says.

As Shanghai's transformation continues apace, Wood is likely to be there to watch it unfold and lend a hand where he can. In 2003, he moved full-time to Shanghai, one of the few foreign architects to make such a commitment. On any given evening, you're likely to find him holding court in the dr Bar, a Xintiandi watering hole he designed and owns, or treating guests to grilled salmon and steaks in his two-story penthouse, followed by a soak in the outdoor hot tub with views of the city's ever-changing skyline.

Will he ever go back to the U.S.? Don't bet on it. Shanghai's growth still offers plenty of opportunities, especially for an architect who understands that it takes more than tall buildings to make a truly global capital. "If Shanghai is unable to provide the quality of life of a world city like Paris or London, it will never become a major financial center," Wood says. "But the wild west atmosphere is being replaced by more sophisticated development strategies. And this will ultimately be to Shanghai's advantage."

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Frederik Balfour, BusinessWeek

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