The dragon is the most mysterious of China's zodiac signs. They're the only mythical animal in the cycle, and dragon years are notorious for big, earth-shaking events. Since we're now staring into the eyes of another Dragon Year, we thought we'd better get prepared, and the best way to do that is to look back to the past.

1940: Occupational Hazards

Shanghai during World War II was a different planet. As the war against the Nazis raged across Europe, China and Japan were locked in the worst conflict in the two countries’ long, antagonistic history. The Second Sino-Japanese War, or The War of Resistance to Japanese Aggression as it’s known here, brought phenomenal damage to the country, and despite decisive victories against the Japanese in Changsha and Guangxi in 1939 and the spectacular destruction of a Japanese airport by Chinese guerrillas, this Year of the Dragon saw an occupied Shanghai.

Longhua Temple was being used as a mass prison camp, the Park Hotel was a Nazi command center and the Japanese had turned the Peace Hotel (then known as the Cathay Hotel) into their headquarters.

“That the Nazis’ influence in China was mostly exerted through their more knowledgeable and numerous Japanese allies was often a source of frustration to them,” notes Jenny Laing-Peach, the Peace Hotel’s heritage historian. “The Japanese never quite understood the German’s fanatically anti-Semitic policies. To the Nazis’ great disappointment, they just didn’t see any reason at all to round up and exterminate Jewish expatriates, which probably rendered China a safer place for Jews than any of the other occupied countries.”

Shanghai was one of the few places in the world that didn't require a visa during the war, and the city saved an estimated 30,000 Jewish lives by taking in refugees. Getting here wasn’t easy though—while over 12,000 Jews arrived here in 1939, the number fell to under two thousand in 1940 as the war intensified.

However, much of China’s future character was forged in 1940. Shanghai’s first bicycle plant opened (known for manufacturing the famous Forever bicycles), a baby dragon Li Xiaolong (Bruce Lee) was born, and Mao Zedong, the founder-to-be of the PRC, outlined a program that would form the central tenets of the Chinese Communist party’s doctrine, later formalized as “Mao Zedong Thought.”

1952: New China

“People were so happy,” says a smiling Yale Xie, a retired government official and now part-time opera singer. “The Korean war had entered a stalemate and fathers were coming home, the Chinese civil war had ended, the PRC had begun and the new China was here. We were entering a new stage. The Communist Party of China took care of the people, the people trusted them, and everyone hoped to build our country into a great one.”

Indeed, 1952 was a year of peace and prosperity for the PRC. China was beginning to establish formal diplomatic relations with other countries, and its national income was estimated at a record US$15 billion.

The new government was also making strides uniting the country. Two important rail lines were opened from Chongqing to Chengdu and from Tianshui to Lanzhou, and telegraph communications were opened between Chongqing and Lhasa.

In Shanghai, the first Shanghai Library opened to the public (it was later converted to the Shanghai Art Museum), the site of the Communist Party’s First National Congress was built into a memorial hall and opened to the public, and there was a large-scale restructuring of universities, bringing many famous professors to Fudan University and making it the top university south of the Yangtze River.

“The world was amazed at how much progress China was making so shortly after the revolution,” Xie continues. “In some ways it was a quiet year, but the whole world was hearing us.”

1964: Going Nuclear

China was pretty happy with itself in 1964. The PRC regime celebrated its 15th anniversary with a mammoth, 700,000-person parade at Tiananmen Square, and Mao himself viewed the time as one of great anticipation, saying in a speech that “we will break away from conventions and make China a powerful, modern socialist country soon. Is this impossible? Is this boasting or bragging? Certainly not! It can be done!”

Food shortages were improving, grain quotas were up, the rationing system had been relaxed and there was a palpable, restless energy to the country. China pushed to prove itself as a world power by stepping up trade with non-Communist countries. The coup de grâce was the successful explosion of an atomic bomb on October 16. With the test, China became the world’s fifth nuclear power.

1964 also saw the first edition of Quotations from Chairman Mao Zedong (aka “The Little Red Book”). The famous tome went through numerous edits before being released in 1965.

In Shanghai, the comforts of modern life gave the city a reputation for being a a hotbed of “revisionism,” a pejorative term used to describe ideas that ran counter to fundamental Marxist principles. Martin Ma, now the gallery director at Peace Hotel, found himself part of a widespread movement to send educated youth to work in the countryside where they were told China needed them most.

“I was working in the hotel, and because it was air conditioned and was a pleasant environment, all the employees were sent to do manual labor in the country to show that we were just as much a part of the common people as anyone else. I thought it was funny. I spent three months ploughing fields and then went back to work. It was a nice change!”

1976: Earthshaking, Literally

A lot of people don’t know that each year of the Chinese zodiac is associated with not just an animal but with one of the five Chinese elements as well. This year was a Fire Dragon year, and things were as explosive as you’d expect.

In July, the Tangshan earthquake rocked China, killing 250,000 and severely injuring hundreds of thousands more (not to mention causing ¥10 billion worth of damage). The earthquake has the unfortunate distinction of being the deadliest earthquake of the 20th century. Tremors were felt as far as Xi’an, 760km away.

The earthquake wasn’t the only thing shaking China that year. Zhou Enlai, the first Premier of the People’s Republic of China, died from bladder cancer in January (technically before the beginning of the Year of the Dragon). Public mourning was discouraged, but a spontaneous memorial occurred at the Monument to the People’s Heroes in Tiananmen Square on April 4, when two million people visited the square throughout the day to honor Zhou’s memory.

However, the outpouring of grief over Zhou’s death and the subsequent passing in July of Zhu De, the founder of the People’s Liberation Army, was nothing compared to the mourning over Chairman Mao Zedong, who died of a heart attack in September.

Combine that with the arrest of the Gang of Four and 1976 was, in the words of Yale Xie, “a turning point. I remember that it felt like the whole country changed, that the people changed. There were disasters, but China was about to end its isolationism, and people were going abroad and learning new information and bringing it back to China. The world was getting smaller.”

While it was a troublesome Fire Dragon year, this element also embodies strength and persistence, something the Chinese people showed in spades as they picked up the pieces of a shattered country and carried them with pride and resilience into the next zodiac cycle. Reform and Opening were just around the corner.

1988: '80s Excess

“Shanghai has always been about interaction with the rest of the world,” says Jenny Laing-Peach. “It’s always been about cultural and fiscal exchange, trade and especially modernity. It wasn’t even technically a city until 1843—Beijing is thousands of years older!”

Fu Dehua, Professor of History at Fudan University, agrees: “Shanghai is like China’s starting point. Things change here, and then spread to the whole country. We’re always leading the country like that—maybe it’s because people here are just more talented and educated.”

In 1988, Shanghai was living up to its reputation. Ten years earlier, China had loosened its isolationist policies and the benefits were now being widely felt. Trade with the United States exceeded $10 billion, up 25 percent from 1986.

But there was still no Metro, no Pearl Tower and very little in Pudong. As Sinologist Jeffrey Wasserstrom tells us, “It was post-Mao, pre-McDonald’s. We used to take the ferry to Pudong to get away from the city. There were no bridges, no tunnels. It took me a long time to believe—even after they started building Pudong—that it would amount to anything.”

“The past was the past,” Yale Xie explains, “and like bamboo shoots after the rain, skyscrapers were shooting up around town. The famous ‘80s excess’ was hitting Shanghai, everybody’s houses were much bigger and Pudong—the head of the Dragon—was being built across the river.”

It seemed like everyone was making money or getting lucky in 1988—even a Soviet consulate worker found US$2.5 million worth of gold and jewelry stashed behind a mosaic wall by gangsters in the ’30s.

Things are rarely all sunshine and rainbows, of course, and Shanghai also experienced a rampant Hepatitis A epidemic after some infected hairy clams were dredged up from polluted waters. It’s not clear exactly how many were affected—estimates range from 300,000 to 800,000.

“It was horrible,” recalls Professor Fu. “Hospitals were crammed with patients. Uninfected people dared not leave their homes. Even some classrooms in the university were being used as isolation chambers.”

Nonetheless, the ’80s were treating Shanghai well, and the general feeling was that very little could halt its progress.

2000: Baby Boom

A billion people breathed a sigh of relief when Y2K didn’t herald a digital apocalypse, and China was ready to have some fun. Maoming Lu was the epicenter of the city’s nightlife scene, Shanghai's first hip-hop club, Club Milk, opened on Changshu Lu and Chinese cinema was put on the map with Crouching Tiger, Hidden Dragon. Meanwhile, the controversial art exhibition “F*ck Off” ran alongside the Third Shanghai Biennale, the city’s first truly international survey of contemporary art.

Chinese couples were also having plenty of other kinds of fun. “The beginning of the 21st century caused quite a baby boom,” says Professor Fu. “Everybody wanted their child to be born in the year 2000. China had three million more babies born than in previous years.”

2000 was also the year that China conducted what was arguably the world’s most ambitious census, which required 10,000 tons of paper for questionnaires, five million enumerators and a million supervisors. The census found that while the population had increased by 132 million people in the preceding 10 years—more than Japan’s entire population—China met its goal of keeping its population under 1.3 billion.

Meanwhile, Shanghai was developing in leaps and bounds. Century Park opened, the Metro extended to Pudong for the first time, and with a population of only one percent of the nation’s total, Shanghai was contributing one eighth of the national financial revenue and a quarter of the country’s total exports.

It was also around this time that Shanghai started making its push to become an international financial hub. The city is well on its way now, but in 2000, it was still far behind Hong Kong—a survey found that 35 percent of companies based their regional headquarters in Hong Kong compared to just three percent here.

Everyone we’ve spoken to believes 2012 will bring peace and good fortune to China, but with every dork from New Age Mayans to Roland Emmerich prophesizing an upcoming end of days, we can’t help being skeptical of anybody’s predictions. Besides, 2012’s year is that of a water dragon, which is said to promise an atmosphere of stillness and conserving of energy. Our prophecy? After a straight week of CNY fireworks, stillness and quiet is all we’ll want.