Shanghai is China's most densely crowded city - but not for long. A government plan announced at the end of last month will slice 1.1 million from the population of the central area, reduce the height of future skyscrapers and create more green space. It is an attempt to make the city more attractive and user-friendly, less of a concrete jungle and more like the Champs Elysees. Today, the city centre, the area containing the former French and International concessions, is a study in contrasts. Spacious villas with gardens built before 1949 by foreign tycoons and Chinese textile magnates sit on tree-lined avenues next to dilapidated housing and smelly public urinals. Beggars carrying children ply their trade outside chic restaurants, beauty salons and smart boutiques. This is not the Shanghai the city leaders want. Their vision is a softer, smarter look with upmarket shops and well-appointed offices. And they want fewer people - especially the poor. The government has been preparing this gentrification blueprint for 18 months, with little public debate. According to the plan, the population of the central area - the 670sqkm within the outer ring road - will fall from 9.1 million now to eight million by 2020. The displaced people will go to live in 11 new towns being built on the outskirts of Shanghai, each with a population of 200,000 to 300,000. The current population density in the central area is three times that of Tokyo and nearly double that of Paris. The plan also calls for lower building density, with the plot ratio for a high-rise commercial building in the central area falling from 7.5 to 4.0 and the ratio for high-storey residential apartments dropping from 4.0 to 2.5. Plot ratios determine how much construction can take place in relation to the land area a development occupies. The winners will be rich businessmen, well-paid professionals and foreigners and others who can afford to pay the high rents of the city centre. The losers will be the 1.1 million residents who will be priced out of the area and forced to move to suburbs up to 40km away. Long commuting will become a feature of life in Shanghai, as in other big cities around the world. The plan represents a dramatic change in direction for a city that has, since 1990 when the central government awarded Shanghai economic privileges, aimed to create a city of expressways, office skyscrapers and high-rise apartment buildings. 'This is a huge shift in direction from the wild property development where tall was beautiful,' said Sam Crispin, the head of Crispin Property Consultants. 'The government does not want Shanghai to become a totally high-rise metropolis and wants to control the height of buildings. It wants to slow things down. Han Zheng is a sophisticated mayor with a background in real estate. He realises that there could be more value in a less dense urban centre.' The city government wants to make the centre like that of Paris, London and New York - a 'modern international metropolis', as officials say. They want a magnet for the rich and famous from places such as Taiwan and Hong Kong, and among overseas Chinese, Europeans and Americans, as well as from all over the mainland. The model is Xin Tiandi (new heaven and earth), a low-rise development of boutiques, restaurants, clubs and apartments in central Shanghai's Luwan district, of which Han Zheng was the chief before becoming mayor in February. The development was the brainchild of the Shui On group of Hong Kong. It involved the demolition of hundreds of homes, many of whose residents say that they did not receive adequate compensation. Xin Tiandi is popular with tourists, foreign residents and rich Chinese, but is too expensive for most Shanghai people. 'The communist leaders are graduates of engineering and science,' said Steve Davison, a consultant who moved his family and business from Hong Kong to Shanghai last year. 'Do they understand the intangible things that give the city the buzz, the sense of excitement that attracts people, like Hong Kong in the 1980s?' Mr Davison said he came to Shanghai because his Asia-wide business could be run from any major city in Asia, house prices were substantially cheaper than Hong Kong, Singapore and Taipei, and his overseas Chinese wife wanted to live on the mainland. 'My sense is that many people are moving here, both ethnic Chinese and foreigners, because they sense that it will give them a new opportunity and the fun of being in an exciting city,' he said. His advice to the mayor was to develop the city's cultural life, open more museums and end restrictions on the flow of information and internet access, which, while less severe than five years ago, give Shanghai a competitive disadvantage compared with other major Asian cities. Another businessman riding the tide of Shanghai's boom is Chinese-American Lee Shu-yin, who moved to the city from Boston in May to set up Grand River Properties, buying upmarket apartments and renting them to foreign executives. 'My aim is to spend US$20 million in the first year,' said Mr Lee. 'Our apartments rent for at least US$5,000 a month. We buy very attractive places in the centre of town. Shanghai is becoming a desirable place and people want to be in the centre. Only the elite will live here.' One of the main architects of the redevelopment plan is Wu Jiang, an architectural professor who is now the deputy director of the city's urban planning department. 'The city government does not want to have the city spread like an ever-expanding pancake because of the rising house prices,' he said. 'Ours will not be traditional satellite cities, but new cities based on big projects and urban infrastructure.' Mr Wu said that more than one million people who now lived in the central area would not be able to afford the prices. 'They will be willing to leave the central area and move if we provide affordable housing, with a comfortable environment,' he said. The price of new apartments in the central area is far out of the range of the average Shanghai resident, who earns 1,500 yuan (HK$1,409) a month. The most expensive apartments in the area sell for about 100,000-160,000 yuan per square foot, with a second-hand apartment going for about 40,000-50,000 yuan per square foot. Take the case of Gao Guolin, 26, a university graduate who works for China Telecom and has just married his college sweetheart, a secretary in a foreign company. Between them they earn 7,000 yuan a month, placing them in the upper-middle-class bracket. In November, they paid 160,000 yuan for an apartment with two bedrooms, located an hour from the city centre. 'I am happy to own an apartment, with a room for my parents,' said Mr Gao. 'But we have a mortgage that will take 30 years to repay. We are prisoners of that mortgage and will have to live frugally, especially if we have a child.' A key element of the plan is the improvement of the city's transport system, which is essential if the hundreds of thousands being forced to move will be able to go easily to and from work. The city has just two subway lines and one light-rail line, forcing most people to commute on overcrowded buses. The city government has promised to have 17 subway and light-rail lines operational by 2020, covering 810km. The city has built two ring roads, one north-south and one east-west expressway. There are also five bridges over and three tunnels beneath the Huangpu River, greatly improving the flow of vehicles. But the sudden growth in ownership of private cars, in Shanghai as in many other big cities, has negated many of these improvements. A recent municipal study showed that average rush-hour speeds on most major roads slowed between 2001 and early 2003. On the east-west expressway, for example, traffic slowed by 27 per cent to an average of 16km/h. The city addressed the problem by restricting the number of car licence plates it issued to between 3,500 and 6,500 a month, and selling them off by auction. The price in recent months has been from 35,000 to 40,000 yuan, equal to the cost of a cheap car. As a result, the number of cars registered in Shanghai is less than half that of Beijing. But many people get around this by purchasing cars in cities and provinces outside Shanghai. The hands of the city government are tied if it wants to take more drastic measures to limit automobiles. Shanghai is home to two of China's biggest auto plants, joint ventures with Volkswagen and General Motors that would fiercely oppose such measures. In addition, the national policy encourages car ownership, with generous bank credit.