Shanghai is one of the largest cities in China. It has a population of about 23 million people and this makes it a global city in finance, commerce, media and fashion industry. It has grown economically due to its financial sector that offers favorable loans to local and foreign investors. Furthermore, this city contains the busiest port that has helped its trading activities to increase, thus empowering it economically through earning foreign exchange. Under the Western model of growth, a city would be developing economically if its housing sectors improved, pollution levels reduced, poverty levels reduced, quality of life increased and the transport sector improved through the improvement of roads condition. This essay considers the impact of the Western model of growth considering the problems of housing, pollution and poverty in Shanghai.

The development of housing sector

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The new economic system under the Western model of growth can be used to assess the development of housing sector in Shanghai.  Under this model, the housing sector of the economy improves if the number of housing units increases so that there are no shortages in the market. Furthermore, its success depends on the improvement of the housing conditions and real estate developers that make structures stable for living in and which contain good health conditions. In the year 2011, the total investment for property development in this city was 217.031 billion yuan (Bridge & Watson, 2011). This was a 9.6 percent increase compared to the year 2010. This proved that the economy was progressing due to the increase in the number of housing units. This increase took place because the financial institutions offered good mortgages for real estate companies. Personal homes investment increased by 42.9 percent to stand at 47.9 billion. This showed that the living standards of the Shanghai inhabitants were improving since many of them could afford their own homes (Bridge & Watson, 2011).  Commercial houses also increased by 2.8 percent. This shows that the economy of this city was improving since the city provided a good environment for doing business. The number of foreign investors who developed houses in Shanghai also increased. The increase in the real estate market in this city helped in improving its economy. Foreign investors funded projects in this city and this provided employment to the inhabitants of Shanghai.

The level of poverty

The new economic system under the Western model of growth can be used to measure the levels of poverty in Shanghai and its effects on the economy. Under this model, the economy of the city or country would be progressing if the poverty levels reduce. When the poverty levels reduce, the consumers will have a high purchasing power and the consumption of luxury goods will increase showing economic progress in that city or country. Although Shanghai has many luxury hotels and skyscrapers, the poverty levels in this city are high. Many people cannot afford decent housing and they end up living in shacks. This was due to the low profits in real estate and due to the European debt crisis and the economic recession in the United States. Furthermore, developers have confiscated farmlands from the poor farmers. According to the National Bureau of Statistics, about 40 million farmers lost their farmlands and this contributed to the rise in poverty levels in Shanghai. Furthermore, the laborers working in Shanghai’s construction sites are paid poor wages (Yu & He, 2007). It is sad to know that these laborers work in poor conditions which posses a high risk to their health. Since the food prices in Shanghai increased, most of the inhabitants cannot afford a balanced diet. (Yu & He, 2007). Since they do not have money to pay for education, their children do not access quality education that would help them empower their lives. Moreover, some of the citizens in Shanghai do not have enough money to pay for quality healthcare. The government of China is creating job opportunities in Shanghai in an effort of reducing unemployment.

The impact of pollution

The new economic system under the Western model of growth can be used to measure the impact of pollution on the economy of Shanghai. An economy of a country or city progresses if the country or city has low levels of pollution. In addition to this, the city should provide measures of stopping pollution such as enacting strict laws that would help in convicting people and companies that pollute the environment. Shanghai has experienced high levels of pollution since November. The city witnessed the air pollution index passing 100 for eight months, which is the worst reading for the past five years (Spoolman & Miller, 2011). In November, the index recorded a mark of 370. These levels are harmful to the human health since when the level exceeds 300, human beings may suffer strong irritations. Researchers believe that the high levels of pollution were caused by sandstorms that swept across northern China (Spoolman & Miller, 2011). In addition to this, the increase of construction activities in Shanghai could have contributed to the increase in pollution. Organizations in China are installing strict measures to construction companies so that they reduce the dust that they release to the atmosphere. The high pollution in Shanghai has caused a reduction in the economic growth in this city. Investors withdrew from this city due to the fear of their health because of the high pollution levels (Spoolman & Miller, 2011). The residents of this city also suffered from health diseases and they spent a lot of money for medication. Moreover, governmental organizations spent lots of money in trying to reduce the pollution levels.


To conclude, the Western growth model can be used to determine the economic progress in Shanghai. The housing sector in Shanghai has improved since the real estate market has expanded increasing the number of housing units for commercial activities and for residents. However, the poverty levels in this city have increased due to the European debt crisis and the economic depression in the United States. The living standards of most residents in Shanghai have reduced due to insufficient income. The pollution in Shanghai has increased and led to the reducing of the economic growth of this city.

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