In one corner of the sprawling Photofairs Shanghai, a fan grabbed photographer Liu Heung-shing to ask about one of his Pulitzer Prize-winning shots on display. Zhou Yupeng, the former vice-mayor of Shanghai, told Liu that his 1991 photograph of Mikhail Gorbachev, taken just after the last Soviet leader’s resignation speech on Christmas Day, had long been his favourite image and he wanted to know all about the composition and the reasons for the long exposure.

It is a delicious irony that the two men reliving a historic moment in communist history were standing in what used to be the Sino-Soviet Friendship Building, now a commercial exhibition centre teeming with corporate sponsorship messages. But amid the hubbub of opening day at the international marketplace, it went largely unnoticed.

The third edition of Photofairs Shanghai was held from September 8 to 10 in what is now called the Shanghai Exhibition Centre, also known as the “wedding cake” because of its elaborate central tower. The fair attracted a record 27,000 visitors, and in the middle of the fray, ringmaster Scott Gray was gesturing to the non-English-speaking security guard to stop letting VIPs enter the main hall, stunningly lit by arches of lights, from the main staircase.

“We have in mind a specific flow, so that visitors can take in the booths in the side galleries. After all, we have rented a third more space this year so that the booths are a little bit bigger and we have raised the level of prestige by setting up a proper VIP lounge,” he said.

Gray is chief executive officer of the World Photography Organisation, the fair’s organiser and a subsidiary of Angus Montgomery, the trade-show empire that knows a lot about how to drive people to buy art. Its head, Sandy Angus, was among the founders of ArtHK – sold for a lot of money to Art Basel’s parent company MCH Group – and, in 2011, bought a stake in the India Art Fair, another local fair that MCH has decided to take a majority stake in recently.

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The content of the Shanghai photography fair has changed significantly over the past three years to adapt to evolving Chinese tastes. This year, most of the 700 photo­graphs, offered by 50 galleries from 15 countries, were contemporary works. Just two years ago, the inaugural fair played it safe with a lot more best-selling vintage prints by the likes of Henri Cartier-Bresson and Robert Capa.

The buyers have evolved, too, from mainly comprising serious collectors with more than 50 artworks to their name, to what Gray called “the luxury buyers”, people with high disposable incomes looking to buy some­thing beautiful for their walls, or to park some of their wealth in artwork they hope will appreciate in value.

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Respect for photographic art as a way to document history is pretty entrenched in China. Following Mao Zedong’s initiation of the Great Leap Forward, dozens of local camera makers emerged, with many copying the technology of European and Japanese brands and making photography relatively affordable to the masses. (Remember those Seagull twin-lens reflex cameras?)

That’s why somebody like Liu, born in Hong Kong and well-known for his stunning pictures of Tiananmen Square in 1989, now has his own photography centre in Shanghai. Numerous, non-commercial international photography festivals celebrate the medium in all corners of the country, including out-of-the-way corners such as Shanxi province, where the Pingyao International Photography Festival has just wrapped up its 16th edition.

But it wasn’t a given that photography would be seen as a good investment. People worry about whether prints last, and whether there will be too many editions. The Shanghai fair tries to convince locals – 80 per cent of visitors are local Chinese – by involving people such as Qiao Zhibing, one of the world’s most avid buyers of art, including photo­graphs. The fair programme included an interview with Qiao about a photography exhibition he held concurrently in his own art space.

Gray says China’s market is not a laggard, to be shown by the West what collecting means. Which is why this Chinese fair is being exported to San Francisco in January (and why they had to rename Photo Shanghai as Photofairs Shanghai).

Artistic director Alexander Montague-Sparey hopes Photofairs San Francisco will attract Silicon Valley wealth and ride on the excitement created by this year’s opening of the Pritzker Centre for Photography in the city, despite the cancellation earlier this year of Paris Photo LA owing to poor response. Organisers also hope the area’s large Chinese population will be interested, given that the fair will feature Chinese galleries.