The People's Republic of China is in the process of rapid demographic, economic and urban change including nationwide engineering and building construction at an unprecedented scale. The mega-city of Shanghai is at the centre of China's modernisation. Rapid urbanisation and building growth have increased the exposure of people and property to natural disasters. The seismic hazard of Shanghai and its vicinity is presented from a seismogenic free-zone methodology. A PGA value of 49 cm s-2 and a maximum intensity value of VII for the Chinese Seismic Intensity Scale (a scale similar to the Modified Mercalli) for a 99% probability of non-exceedance in 50 years are determined for Shanghai city. The potential building damage for three independent districts of the city centre named Putuo, Nanjing Road and Pudong are calculated using damage vulnerability matrices. It is found that old civil houses of brick and timber are the most vulnerable buildings with potentially a mean probability value of 7.4% of this building structure type exhibiting the highest damage grade at intensity VII.