'Formula One picking China and Shanghai shows Shanghai has a good international reputation. This will help raise the global status of China and Shanghai,' government spokeswoman Jiao Yang says.

Mao Xiaohan, general manager of Shanghai International Circuit Co Ltd, says: 'The inaugural China Grand Prix will be a consummate gala for motorsport fans. We warmly welcome guests from all over the world. The trip to Shanghai will be unforgettable and exciting.'

Shanghai sees broad benefits to commerce, trade, culture, travel and the car industry, though officials haven't quantified their expectations. The city has launched itself into a frenzy of preparations to make sure nothing goes wrong, capturing local fans along the way with a slew of promotional activities.

At the headquarters of the official souvenir provider this week, workers were hurriedly packing hundreds of gold-plated lighters stamped with the F1 logo into boxes. In a room packed with merchandise ranging from binoculars to thermos bottles, Shanghai Racing Commercial Co executive Yu Xiulin explained: 'We are really busy. Time is short.'

In the suburbs surrounding Shanghai, factories were churning out polo shirts and hats for the souvenir stands.

In an upscale neighbourhood on Huashan Road, residents were recently startled by the sound of helicopters racing overhead as race organisers held a test run for evacuating injured drivers to hospital.

At the track in a distant western district, workers have put the finishing touches to a facility which has already passed a test run with the inaugural China circuit car race.

All 150,000 tickets available to the general public have been sold, with another 50,000 tickets given out by sponsors, filling the 200,000 capacity. Ticket prices range from 3,700 yuan for the best seats for all three days to 169 yuan for standing room only on the second day. 'Our tickets are relatively cheaper than the other 17 events on the F1 tour,' said Mao.

With the race falling just before the week-long National Day holiday, top hotels are predicting full occupancy. 'For most of the hotels, the larger ones at least, the bookings were made more than a year ago,' said Veronica Ann Lee, director of marketing communications for The Westin Shanghai.

Those who can't be at the track can still watch the action on TV. CCTV, the official domestic broadcasters, will broadcast the race to an estimated audience of one billion.

Shanghai hasn't seen such a spectacle since the Asia Pacific Economic Co-operation (Apec) meeting in 2001, when the city literally turned the financial district into a ghost town by stopping all traffic and ordering workers to stay at home.

Shanghai brings much to the table in hosting an international event. Few others cities would spend 2.64 billion yuan on a racetrack, mobilise 2,500 volunteers and pledge to build a railway line to the venue.

Ferrari boss Jean Todt said: 'I was in Shanghai for the circuit's opening and it's unbelievable what they have done, just unique.'

The real test for the F1 event is transport, since the track is far from the city. Last month, Shanghai opened two expressways especially to handle the traffic flow. Spectators must buy special bus tickets in advance. People racing out to the track in their own cars must pre-book parking spaces.

Shanghai's debut into the motor racing world comes at a time of chaos in the industry with the Jaguar team dropping a bombshell last week that they would not be on the grid next season. F1 was already in spin over major rule changes due to be introduced next season, revenue sharing and carmakers threatening to start up their own championship.

The track will be a venture into the unknown for all drivers but seven-times world champion Michael Schumacher, who has won 12 of the 15 races this season, will be favourite to continue his enduring dominance. 'No one knows the Shanghai circuit which makes this race very exciting,' said the Ferrari superstar.

The race will also welcome back 1997 world champion Jacques Villeneuve, who has joined the Renault team for the final three races of the season.

Michael's younger brother, Ralf, will also be making a comeback after crashing into a wall at the US Grand Prix at Indianapolis in June. The Williams driver suffered two spinal fractures in the crash, but came through testing at Silverstone last week.

Even after the race, Shanghai won't rest. The city will host the Heineken Open tennis match from September 27 and an NBA exhibition game between the Houston Rockets, featuring Chinese superstar Yao Ming, and the Sacramento Kings on October 14.

After designating a vice-mayor to handle the football portfolio last year, the future sporting ambitions of the city are clear.