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This paper is concerned with the development of creative industries as a key strategy in promoting Shanghai’s global city status, one based on both the rejection and the exploitation of the city’s pre-communist identity as the most modern city in the East Asia. In particular, it looks at the evolution of ‘art clusters’ from exemplifying a cultural renaissance in China to the industrialization of culture. Their identity as places for alternative aesthetic values has been downplayed and disguised by hyper commercial interests extending from the global success of Chinese contemporary visual art. It investigates the different logics at play in shaping the future of a creative economy in Shanghai, including the production of culture, culture-led urban regeneration and cultural policy. It raises questions about the future of Chinese cities like Shanghai that are going through the post-industrial modernization process with a clear focus on culture and creativity. This most commonly adopted western modernization logic has generated varied outcomes in Chinese cities. Shanghai, as the most successful city in adapting the cultural industries logic, faces its own challenges too. Art clusters are less like bohemian quarters with intrinsic cultural values and more like business centres and tourism hotspots within which globally influenced cultural values are manufactured and traded.