Cross the road in Shanghai's former French Concession and you commit yourself to participating in a form of traffic ballet, the subtleties of which will elude you at first. A red light here is not, as you might previously have assumed, a full stop in a vehicle's onward journey. Instead, the closest it gets to punctuation is as a comma, the briefest of pauses, allowing everyone to assess life-preserving spatial relationships.
For the pedestrian such delicate nuance is everything. In this case, I had clearly misinterpreted the green-man signal shining opposite me as an all-clear to cross the road. And presumably that is what the elderly gentleman explained to me, in unambiguously exasperated Mandarin, after he'd cycled rather painfully into my leg.
Even the threat of traffic wipe-out does not detract from the charm of this enclave of residential back-streets, created in the late 19th century when parts of Shanghai were loaned to foreign powers for trading purposes. The colonial-era influence extends as far as the 1920s low-rise villas that line the roads, and to the plane trees that offer welcome splashes of green against sombre urban grey-brown.
I continued – limping slightly – down Fumin Road, its pavements packed with people, passing shabby local stores selling everything from motorbike parts to cats. At number 87 I stopped to peer in at the mass of well-to-do diners enjoying lunch at a smart eatery called Guyi. The cuisine here is from Hunan, a province south-west of Shanghai that is known for its spicy, chilli-centric flavours. A slogan outside boasted that the restaurant offered a "new concept share with your heart". (Given the notoriously fractious relationship between the Chinese authorities and Google, it seems odd that most of Shanghai's signage appears to have been run through the internet company's "Translate" application for the benefit of Westerners. Perhaps it's no coincidence that the words are rendered strangely meaningless in the process.)
Aside from exotic cuisine, what strikes you most is the sheer scale of the commerce being undertaken on these streets. The former French Concession is far from the high-rise banks and insurance firms of the business district, but the trading is just as intense. Piles of products – vegetables, toys, clothes, kitchen utensils, even squares of turf – are available for purchase. And there's high-end stuff to choose from as well. Fancy a haircut? Try Contesta Rockhair – with branches in Rome, Florence, Miami and now one close by on Julu Road. By any chance a miniature railway buff? Head for the Bachmann Model Train store at 100 North Xiangyang Road.
Pause for even a moment on Huaihai Road, the area's main thoroughfare, and you will probably draw a crowd. Laminated cards displaying counterfeit Gucci bags and Rolex watches will be offered for your appraisal. Hands will grasp your upper arm as the price of these items halves, halves and halves again – despite your evident lack of enthusiasm. Close by, in the mainstream economy, a vast H&M rises next to an equally vast C&A, and high-street brands swiftly give way to international luxury labels: Omega, Ernest Borel, Tasaki. The potential for last-minute Christmas shopping here is awesome, and all budgets are catered for – from a 50-yuan (£5) knock-off satchel to a sky's-the-limit designer outfit.
I stopped for a breather at the corner of Mao Ming Road, where the Cathay Cinema looms, vaguely art deco in style and therefore almost ancient given the glass-and-steel buildings that surround it. The billboard showed a grinning Michael Douglas in Wall Street: Money Never Sleeps. For a notionally communist country, the People's Republic of China does capitalism awfully well.
Shanghai isn't a sentimental place: the epic building projects at Pudong, east of the Huangpu River, are testament to that. In less than 20 years, a vista of paddy fields and villages has been erased by a glittering forest of skyscrapers. Here the epic, elegant Jinmao Tower stands like the backdrop to a re-imagined version of Fritz Lang's Metropolis. Next door the Shanghai World Financial Centre looks like a giant, futuristic bottle-opener, while the Oriental Pearl Tower pierces the sky: a baroque hypodermic needle.
From Pudong's forest floor sprout hi-tech malls and dazzling designer stores – particularly dazzling in the case of newly opened Louis Vuitton outlet, which is plastered in shimmering LEDs. Despite all those street-corner fakes, demand is such that the French fashion house now has three shops in the city: a Chinese Year of the Handbag seems inevitable.
No, Shanghai isn't sentimental, but a strange form of nostalgia creeps in every now and again. For a start, there's the Bund: a line of grand stone-clad buildings that peers disdainfully at the hi-tech Pudong skyline prickling the opposite shore. On the face of it, this is the perfect representation of early 20th-century European financial acumen pitted against the flash cash of a tiger economy. But look closer: the battle has already been lost. The oddly temporary-looking Waibaidu Bridge, built by the British in 1907, marks the Bund's northern limit. Walk south and you'll see that many of those grand bank and insurance company buildings have been transformed into – yes - high-end boutiques, art galleries and restaurants, servicing the Chinese new rich. Such are the retail opportunities on the ground floor of the new Peninsula Hotel at No 32 that the lobby feels more like a department store than a hotel, despite a grandly marbled restaurant.
Some of the Bund's buildings remain true to their original purpose. The Fairmont Peace Hotel at the eastern end of Nanjing Road has reopened after a refurbishment that harks back to its art deco heyday, the interior a slightly garish yellow and green, the jazz bar a dark grotto. And what was once the Shanghai Club at No 2 has become the Waldorf Astoria Hotel. The 34-metre Long Bar has been restored, down to the last dark-wood panel. Here social status was once indicated by how close your barstool was to the window; the nearer the better. In those days Chinese nationals, and women in general, were barred from entering.
In the evenings, the Glamour Bar – tucked away at the side of No 5 – exudes colonial-era decadence, all pink banquettes and mirrors. There's a swing dance class here on Thursday nights, where expatriates sling gin and "Je Suis Glamour" vodka cocktails go for 78 yuan (£7.80) a pop. The sense of temporal dislocation extends to the kitsch eccentricity of the Tourist Tunnel, which links the Bund to Pudong. In it, pod-like tramcars take visitors from one shore of the Huangpu to the other, accompanied by a trippy neon light show, weird inflatables and a booming voice-over.
It was while I was shopping at the hectic Yuyuan Market back in the Old City that the line between reality and pretence finally seemed to collapse. Suddenly the fake "antiques" I was perusing among the narrow stalls began to seem more representative of Shanghai's urgent pace than anything of genuine antiquity. Yu Gardens, which lie behind the complex, were created in the 16th century, but the market buildings are all reconstructions – even the Huxin Ting teahouse, reached by a zig-zag bridge at the centre, above a lake stuffed with carp. The Taoist City God temple rises alongside: it feels suitably ancient, but was in fact rebuilt in 2006.
Then there's the Xintiandi development, which lies to the east of the French Concession, beyond the massive flyover of Chongoing Road (lit up in blue at night, like a bolt of lightning arching across the city). These pretty restorations of the original shikumen ("stone gate") houses have been converted into an open-air mall. Here, if your urge to spend has not yet been sated and your credit card still has some headroom, you can try the impressively expensive Shanghai Tang boutique, or dip crispy prawns into wasabi mayonnaise at the adjacent Shanghai Tang café.
Every self-respecting city restores its "heritage architecture", as the brass plaques on the Bund describe it. But Shanghai does it with real gusto. Everything gets a makeover, from the newly rebuilt Jing'an buddhist temple on Nanjing West Road – itself ringed with shops – to the narrow lanes of Tianzifang, off Taikang Road, where converted industrial buildings now contain pretty shops and smart cafés.
The single-minded focus on consumption is strangely bewitching, especially as your arms become weighed down by shopping bags. By this point I'd found myself in possession of a battered Mah Jong set, a pair of cuddly pandas, some Chinese calligraphy brushes and the 2010 festive must-have item: a glow-in-the-dark yo-yo. Gucci and Prada would have to wait. But as darkness fell and Shanghai burst into a glittering frenzy of neon and LED displays, I was in need of some tranquillity, too.
The PuLi hotel opened just over a year ago, a relatively modest 26 storeys rising above the busy shopping malls of Nanjing West Road. It neither harks back to a bygone age (as the Waldorf and the Peace Hotel do), nor tries too hard to be at the cutting edge (as the vertiginous Park Hyatt Hotel at the top of the World Financial Centre does). Instead, the 209 rooms and 20 suites feel calm and contemporary, and exude a sense of elegant luxury. There is a double-height foyer dominated by a dramatic bar, with just enough hints of China – dark lacquered wood, gleaming black floor-tiles – to give guests a sense of where they are. And while there is plenty of technology on offer – Bose Wave music systems, DVD players – there are also human touches. A couple of replica Foo Dogs from the Han Dynasty grimaced next to a brass incense burner in my room; my bathtub had a stunning view over Jing'an Park, a welcome triangle of greenery.
However, human touches aren't really what Shanghai is about. This city specialises in the epic, at any cost. Earlier this year, the World Expo came to town; the dizzyingly experimental pavilions stand near Lupu Bridge, an elegant span to the south of the city centre. The convulsions the city went through to stage the event were immense. An entire shipyard had to be relocated during the building of this £38bn project. Six new subway lines and a new airport terminal were opened and thousands of families were rehoused (apparently you can do that in China). By the time it came to an end on the last day of October, 72 million people had come to boggle at what Shanghai had created.
The Expo slogan still remains, a manifesto plastered across the streets. "Better city, better life," it says. Whether your Rolex is real or a fake, in Shanghai the future is always just a second away.
Travel essentials: Shanghai
* The writer flew with British Airways (0844 4930787; ba.com), which operates six flights per week from Heathrow to Shanghai. Returns flights cost from £641.40. Virgin Atlantic (0844 874 7747; virgin-atlantic.com) and China Eastern Airlines (020-7935 2676; flychinaeastern.com) also fly the same route.
* The PuLi Hotel and Spa, 1 ChangDe Road, Jing'an District (00 86 21 3203 9999; thepuli.com) offers double rooms from 3,880 yuan (£388) per night including breakfast.
* A single-entry tourist visa to China costs £65.25. Applications should be made to Chinese Visa Application Service Centre (020-7842 0960; visaforchina.org.uk), which has offices in London and Manchester.