The crush happened in a crowded square shortly before midnight as people packed the Bund area to welcome the New Year, according to a local government statement.
The Bund, renowned for its pre-Chinese revolution architecture, is the former financial district of the country’s commercial hub and now a popular tourist destination, packed with high-end restaurants and expensive boutiques.
The cause of the accident was under investigation, the statement said, adding city government leaders had called for “every effort” to care for the 42 injured.
A photo on the website of the Shanghai Daily newspaper showed what appeared to be dead and injured people lying on the ground with crowds still in the background.
The injured have been taken to at least three local hospitals, the Shanghai government said in a separate statement.
By dawn, there was little evidence of the disaster beyond a lone police van with its lights flashing and rubbish discarded by celebrants the night before.
An elderly woman doing her morning exercises on the Bund said: “We offer sympathy for the dead and injured.”
An urban worker sweeping up debris added simply: “There is nothing left”.
Although people have traditionally flocked to the Bund to celebrate the New Year, the district government overseeing the area has more recently hosted a performance to mark the occasion, local media reported.
The site was moved to a new location on the Bund for last night’s celebration, specifically due to concerns about over-crowding, after nearly 300,000 people turned out last year, the Shanghai Daily newspaper said on its website.
The square where the stampede occurred is named for Chen Yi, the first mayor of the city after the Communist Party took power in 1949.
– High-rise inferno –
Most large gatherings in China are carefully controlled by authorities but the country has seen other incidents in which overcrowding has caused panic and deaths.
Last year, 14 people — some of them children — were killed and 10 injured in a stampede that broke out as food was being distributed at a mosque in China’s Ningxia region.
Also last year, six students were killed in a stampede at a primary school in Kunming city in the southwest after the accidental blocking of a stairway corridor.
The Bund stands on the opposite bank of the Huangpu river from Pudong, the concentration of towering skyscrapers that epitomises Shanghai’s role at the heart of China’s economic boom.
But despite its rush to modernisation and position among China’s most advanced cities it has not been immune from accidents and problems with urban management.
In November 2010 a fire at a high-rise apartment building left 58 people dead, with some panicked residents attempting desperate jumps to safety or seeking refuge on scaffolding surrounding the structure.
The disaster became a focus of public anger over how such an incident could occur in a modern city, which hosted the World Expo the same year.
A preliminary investigation said welders accidentally ignited nylon netting around the 28-storey building, and five officials were later jailed, including the district head of construction, who was found guilty of abuse of power and accepting bribes and sentenced to 16 years in prison.
Two Shanghai metro trains collided in September 2011, injuring 284 people and prompting fresh accusations that safety had been compromised in China’s rush to develop its vast transport network- AFP