Although the local population and foreign immigrants had established common ground, a large divergence remained. Mutually incomprehensible lines of thoughts and conflicts of interest resulted in huge political and social problems in the early 20th Century, ranging from protests and riots to massacres.

At the beginning, Shanghainese were not allowed to live in international settlements nor to enter many public spaces (e.g., parks and clubs) designated for foreigners. Later, when more local Chinese, who originally entered the international settlements to flee from the Anti-Qing Taiping Rebellions, gained greater dominance in the former foreigners' territory, foreigners felt threatened and formed the Shanghai Fascisti to protect their profits and well-being in the city (Item 33).

Meanwhile, foreign settlers' superior and privileged status in Shanghai became the source of local Chinese resentment against the expatriates. Accumulated resentments and recurring conflicts eventually resulted in the tragic May 30 Incident (1925) when the British municipal police opened fire and killed 13 demonstrators and wounded many more during a mass worker-student demonstration (Item 31). The incident triggered a rash of nationalists' demonstrations throughout China until, after three months, the British fired the police officials in charge and paid an indemnity to the victims' families.

Tension between local and global residents (except Japanese) lessened during wartime. As foreigners helped Shanghainese cope with the Japanese invasion (Item 29), local residences became more available to expatriates, including Jewish refugees escaping from Hitler's reign of terror (Item 28).

Auspiciousness and harmony has become more conceivable in the current, second internationalization period of Shanghai. Apart from official preferential policies to foreigners and international investments, Shanghai has taken steps towards a truly global city by organizing at least one successful international cultural festival per year since the early 1990s. Now, the entire city is anticipating the forthcoming World Expo 2010 Shanghai (Item 35) with the theme, "Better City-Better Life" for local residents as well as international visitors.