A new strategic thinking is put forward to resolve the urban problems in Shanghai based on the tendencies of recent shift of economic structure and development. It is argued that the traditional institution of urban economy and management is responsible for the degeneration of urban environment. Thus, a change of mechanism of urban functioning is essential to the sustainable growth of Shanghai City. The key part of the new strategic thinking of Shanghai urban renewal is the adjustment of urban land use structure and industrial structure, using land use right leasing of the emergent land market as the start force of the structure adjustment by accumulating capital. And the development of Pudong new area provides right time and space forShanghai urban renewal.
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