In the beginning it appeared likely that the settlements would be run as one administrative unit. But the French finally decided to set up a separate municipal government. The French Consul had signed the 1854 Land Regulations, but they felt they were not bound by the regulations as they they were never ratified by the French Government. So on May 13th, the Municipal Council of the Concession Francaise was formed. It differed from the English Municipal Council in that all its decisions were subject to the approval or veto of the French Consul. As most of the foreign trade of Shanghai was carried on through the British Settlement, the French Concession found it difficult to raise revenues, and depended largely on income derived from licenses to opium divans, brothels and gambling houses.

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The French Concession was much quieter than the International Settlement. Leafy lanes, western-style mansions and gardens. It was only in the 1930s that it gained a reputation as a haven for vice and drugs. The clubs were mostly in the concession -- and many of the churches. The White Russians moved into the area, particularly along Avenue Joffre. And so did many rich and influential Chinese. For the Chinese Communist Party and leftist writers and intellectuals, it was also a haven.