Polishing Up a Capitalist Jewel (int'l edition)

In the 1920s, when he commissioned his new Shanghai headquarters, Hong Kong & Shanghai Bank Chief Manager A.G. Stephens told his architect: ''Spare no expense...Dominate the Bund.'' The Bund is the mile-long thoroughfare once known as the Wall Street of the Orient. And Stephens' onion-domed neoclassical structure, guarded by a pair of bronze lions, did indeed become the jewel of this waterfront street. Sir Ronald Macleay, Britain's Minister to China, grandly pronounced the completed structure ''unsurpassed by any financial center or commercial house in Asia and the Far East from the Suez to the Bering Sea.''

But then came depressions, wars, and the Cultural Revolution. By 1990, the bank building, long since abandoned by its original occupant, had become just one more grimy structure in a long row lining the Bund. The art deco, English Tudor, and neoclassical edifices built in the heady days of capitalism in Old Shanghai, when 113 financial institutions operated in the district, had turned into shabby reminders of bygone glory.

FIXER UPPER. But today, thanks to a growing recognition that the past has commercial appeal, businessmen and women in Shanghai, Beijing, and elsewhere are leading the rediscovery of China's architectural heritage. Commercial structures in the Bund, like most other property here, is government-owned. But the government has little money for preservation, and what there is goes to culturally important structures, such as the house where the Chinese Communist Party was born. Still, the government designates some buildings as ''municipally preserved,'' which makes it all but impossible to tear them down. If businesses want to occupy the buildings, they have to undertake restoration. So some 100 older structures in Shanghai have been reclaimed, including 20 on the Bund, many by foreigners.

Restoration of the Bund by foreign financial institutions began five years ago with an office in the corner of the neoclassical building that houses the Peace Hotel. ABN AMRO's predecessor company, Netherlands Trading Society, once occupied the site but fled in 1954, five years after the Communists came to power. ABN AMRO wanted to move back to the Bund from another part of Shanghai to underscore its commitment to doing business in China. So it spent $1 million restoring the site, which had been turned into a storeroom. In 1994, it moved in--and received a housewarming gift from the cobwebbed past. A former Trading Society employee, C.L. Zhang, now 78, presented the Bund with the bank vault's keyhole plate. He had found it on a pile of rubble after the building was gutted and had kept it safe for 40 years.

The reopening of the Hong Kong & Shanghai building, however, really set the example for restoration on the Bund. The bank left the site in the late 1940s, and about four years ago, Shanghai Pudong Development Bank, a local institution whose majority owner is the Shanghai government, leased the building. Pudong expected the prestigious Bund site to boost its image, says Gu Liang, deputy manager--at a cost of $12 million.

One reason for the expense was that China lacks good preservation experts, so the law requires restoration projects to employ foreign conservation architects. Pudong brought in Trevor Holmes, a British expert on Chinese traditional architecture, as an adviser. Under his direction, workers got busy at the tasks of ridding the building of grime and dirt, replacing the marble floors, and cleaning each mosaic on the bank's ceiling. Pudong also tracked down the bronze lions that in the old days had bracketed the bank's door and returned them to their guardposts. They had been stored in the basement of the Shanghai History Museum.

Reopened a year ago, the half-block-long building once more dominates the Bund with its shining white facade and national flags flying. Inside, crystal chandeliers light marble floors as shiny as ice. Restored clocks tell the time in the old bank's eight major locations: Shanghai, Hong Kong, New York, London, Calcutta, Paris, Tokyo, and Bangkok. On the ceiling of a small rotunda, customers admire those same cities depicted in mosaics. ''A lot of people visit our bank because of the building,'' says a spokesman. Adds an employee: ''People will think the bank has a lot of money, and they can rely on it.'' In fact, most Chinese approve of the restorations. ''It's a good thing because it's part of the city's history,'' says one.

Just as impressive is the $10 million restoration of the neoclassical American International Assurance Co. building just down the street. AIA was founded in the building in 1931 but moved its headquarters to New York in 1939 because of China's unstable political situation. A few years ago, when China allowed insurers back in the country, AIA applied to the Shanghai government to lease its old haunt and once again name it the AIA building.

SENTINELS. Shanghai's restoration standards are modest, requiring only that the key architectural elements be kept. AIA went beyond that, restoring eight statues of Hercules that stand like sentinels outside the building. They were damaged during the 1966-76 Cultural Revolution, when bands of youths roved the country destroying works of art in response to Chairman Mao Zedong's call to rid China of reminders of the past. AIA expects its investment in aesthetics to pay off. When Maurice R. Greenberg, chairman of American International Group, AIA's parent, officially opened the building last year, he used the renovation to showcase AIA's and China's mutual ''heritage and history.''

Shanghai's business-backed restoration activity isn't limited to the Bund or even to office buildings. In 1997, Chris Cooper of Premier Services, which restores buildings for business use, renovated a French manor house and turned it into Sasha's, one of Shanghai's trendier restaurants. The house was built in the 1920s for a Jewish business mogul and later was part of the Soong family compound. The Soongs were known less for their house, however, than for their three beautiful, Western-educated daughters. The first married an industrialist. The second married Sun Yat-sen, revered as the man who banished feudalism in China. The third became the wife of Chiang Kai-shek, the leader of Nationalist China and later of Taiwan. After the communists came to power in 1949, the house was the office of Mao Zedong's infamous wife, Jiang Qing--later a driving force in the Cultural Revolution that caused so much damage to China's architecture. Such a legacy would make the building a draw for both tourists and locals, Cooper figured. So he spent $1 million and seven months restoring it. He gutted the interior, restructured the foundation, and redesigned the roof. These days, Sasha's guests sip beer on the site where Chiang planned his campaign against the communists in the 1940s and enjoy Mediterranean cuisine where Madam Mao ran the Beijing opera in Shanghai. ''These older buildings have character,'' and customers like it, says Cooper, who sometimes leads tours of the house. He trumpets the building's history--and its renovation--on his menu.

Restorations like Sasha's are such commercial successes that speculators and developers are acquiring long-term leases on other historic buildings. Shui On Group, a Hong Kong developer, is restoring a century-old residential lane. It wants to turn the street of narrow, red-brick, three-story houses into boutiques, bistros, and art galleries. This $144 million renovation of the Xin Tiandi (New Heaven & Earth) project should be completed in 2001, just in time for the Asia-Pacific Economic Cooperation meeting. When delegates arrive, they will see a Chinese capitalist version of the ''Wall Street of the Orient,'' which has become a striking reminder of the glory of Old Shanghai.

By ALYSHA WEBB