Phase Three in the Battle of Shanghai
Starting the night of October 26, the Chinese began withdrawing from Shanghai urban center.
Because Dachang and other vital suburban towns had been lost already, Chiang Kai-shek ordered the Chinese troops to retreat from Zhabei, Jiangwan (江灣), and other positions that the troops had held for seventy-five days without faltering. However, Chiang ordered one battalion of the 88th Division remain in Zhabei to defend the Sihang Warehouse on the northern bank of the Suzhou Creek. Chiang could not fully retire from downtown Shanghai because the Nine-Power Treaty conference was in session in Brussels for a possible Western intervention in the Sino-Japanese conflict. The rest of the Chinese troops crossed the Suzhou Creek and regrouped for the final showdown with the Japanese army.
On 5 Nov 1937, Japanese 10th Army (equivalent of a western corps in strength) landed in Jinshanwei, south of Shanghai, nearly unopposed due to Chinese troops' concentration near Dachang and other regions north of the city. With the city encircled, and not seeing any positive results out of the Brussels conference, Chiang finally issued a general retreat order on 8 Nov, and by 12 Nov the city was cleared of remaining Chinese soldiers. Japanese advances broke Chinese defenses at Kunshan on 10 Nov, the Wufu Line on 19 Nov, and Xicheng Line on 26 Nov. Chinese Army fell back to the capital city of Nanjing.
Japan's Economic Expansion into Manchuria and China in World War Two