It is 6:30 a.m., rush hour. A dozen people are knocked down, trampled and overtaken in the scramble for the Huangpu River ferry.

Already dangerously overloaded, the craft creaks away from the dock, leaving hundreds of grumbling commuters with no choice but to get back in line. When they finally reach the other side, they wait again -- this time for a bus. They hurl themselves into a standing-room-only crowd while the vehicle pulls away, the door slamming repeatedly on dangling arms and legs.

Another day has begun in the most crowded city in the world's most populous nation.

This is Shanghai -- muscular, proud Shanghai, which led the rest of Asia into the modern age of skyscrapers and electricity. Its population, long China's most talented and diverse, grew to 12 million this year, making it the world's second largest metropolis after Mexico City.

But Shanghai's great human resource has become its curse. Too many people fight for too few goods in too little space, creating a nasty blend of pollution, poverty, overcrowding, shortages and corruption.

The calamity of Shanghai distorts the national picture only slightly. China, like its most cosmopolitan city, approximately doubled its population during the past 35 years under Communist rule, stretching thinly developed resources even thinner. There are about 1,038,000,000 Chinese today -- 22 percent of mankind -- squeezing into habitable space equal to half of that available in the United States and feeding themselves on just 7 percent of the earth's arable land.

As it desperately pursues modernization, the world's only demographic billionaire has embarked on a course of family planning of unprecedented reach for a developing nation. Since 1979, the Communist government of Deng Xiaoping has enforced a policy limiting most Chinese couples to a single child, a program designed to cap the population at 1.2 billion by the year 2000 and to whittle it down further in the next century. The policy is said to be vital if the economic and social reforms now sweeping the nation are to succeed.

But the one-child policy, while lofty in goal and successful in cutting birth rates, often exacts a social price as profound as the problem it seeks to solve. China's leaders, as they grapple with a situation so far unmatched anywhere in the world, have developed a solution that in its implementation has proven far more complex than they themselves perhaps believed.

Evidence of the policy's impact, gathered over the past three years and contained in subsequent parts of this series, reveals a pattern of official coercion and brutality in the name of birth control -- sometimes limited to villages or regions, sometimes nationwide. In their zeal to save China from its reproductive excesses, authorities have resorted to roundups of pregnant women for abortions, infanticide in city hospitals and sterilization campaigns backed by harsh penalties for resisters.

Slashing through China's traditional, family-oriented society, the policy has aroused strong public resistance, especially in rural areas, where peasants counter one-child controls with subterfuge, occasional violence and female infanticide -- at a loss of hundreds of thousands of baby girls yearly.

Despite this fallout, Deng and his band of modernizing Marxists appear willing to assume the political risks of the one-child policy if it means keeping China from another self-destructive binge of births.

"Excessive population growth will not only adversely affect the increase of per capita income but also cause serious difficulties in food supply, housing, education and employment, and it may even disrupt social stability," General Secretary Hu Yaobang said at an important meeting of the Communist Party in September 1982.

"We must never slacken our effort in family planning," he said.

Shanghai is a grim reminder of the alternative.

Within the next decade, Shanghai is expected to swell to 13.5 million people, adding to an already bloated megalopolis where one of every eight inner city residents is homeless, where consumers stand in line for three days to buy a color television and where visitors in want of hotel rooms have to sleep in such odd places as barbershop chairs.

A baby is born here every two minutes, pulling the noose a little tighter around a city that is being strangled by its own population.

"Nobody lives peacefully in Shanghai," said a retired electrician who has lived here his whole life. "People are constantly fighting over every inch. You can never escape it." No Longer 'Paris of the East'

It was not always that way in Shanghai. When the Red Army marched in in May 1949, it acquired a major international port of 6 million people divided into pockets of great wealth and poverty. There was the Shanghai of Chinese capitalists and western financiers, a place known for adventure, entrepreneurial flair and civility. This was the "Paris of the East," Asia's most prosperous city -- a world of stately mansions, grand boulevards, chic cafes run by White Russian emigres, night-clubs with names like Casanova, dog races and posh country clubs.

Then there was the Shanghai of the wretched -- naked peasant children, diseased beggars and half-starving coolies who lived in shanties and scraped for a daily bowl of rice.

Shanghai was above all a city bristling with commercial energy, an entrepot of opportunity where perfumed prostitutes in Suzie Wong dresses jostled British bankers and the streets rang with a cacophony of singing peddlers, heaving rickshaw boys, drunken sailors and clacking mah-jongg tiles.

Thirty-five years and twice as many people later, Shanghai's energy is drained by the daily struggle for breathing space, goods and peace of mind.

No one starves, and no one flourishes, in Shanghai anymore. But the "city of blazing lights," as it was once called, has dimmed into a monochromatic battlefield where almost everyone fights for a basic level of subsistence. Aside from the incessant din of bicycle bells, the streets are mostly silent except for the warning: "Hey, move out of the way."

Shanghai, despite its burdens, is still a jewel to many outsiders. Chinese travel hundreds of miles for the smart shops on Nanking Road or for a look at the old financial district along the Huangpu River -- China's only real skyline.

But an insider's view of Shanghai, focused by official reports and interviews with residents and authorities, is of a city barely able to support its millions.

The average Shanghainese lives without toilet or bathing facilities in a room about the size of a double bed.

He slugs it out with three others for every available place on the bus.

He enjoys a patch of green space the size of a standard newspaper opened at the fold.

He nestles with his wife in park bushes on summer nights for lack of privacy at home, bringing along his marriage license to show inquiring police.

He breathes air that is polluted 10 times worse than U.S. standards allow, contributing to an incidence of lung cancer in males that is three times higher than in New York City.

He drinks water that is largely chlorinated sewage and eats vegetables laced with industrial toxins -- factors contributing to male stomach cancer rates six times higher than in New York.

He has only one chance in 25 of sending his child to college.

He exchanges favors and greases palms to guarantee supply of basic necessities.

He lines up for nearly everything -- there is one optometry outlet for every million people, one tailor shop for every 90,000 people, one home telephone for every 2,400 people and one public toilet for every 60,000 people on a busy day in the downtown commercial district.

Shanghai's afflictions can be blamed on bad planning and radical politics, which sacrificed human welfare for much of the Communist era. City officials, for example, froze all housing construction from 1967 to 1972 during the chaotic Cultural Revolution.

But the one problem that underlies and intensifies all the others was self-inflicted: overpopulation.

Most of the damage was done in the 1950s as China stabilized from decades of civil war and foreign occupation. The new Communist authorities battled disease, drastically cutting death rates. And, in the blush of victory, Chairman Mao Tse-tung advocated big families in the belief that more people meant more productive labor.

"Every stomach comes with two hands attached," he said at the time.

Shanghai's population exploded in record-high growth rates averaging 3.7 percent annually -- quadruple today's levels. Between 1950 and 1958, the city grew almost by half, adding 2.4 million people.

Residency rolls swelled with the influx of more than 1 million peasants who flocked to Shanghai during the 1950s in search of work. Although Shanghai closed its borders to internal migration 25 years ago and began cutting its growth rate earlier than the rest of China, the city is still paying for its runaway growth of the 1950s.

Shanghai is packed as tightly as a matchbox. Up to 425,000 people squeeze into a square mile of Shanghai's inner city -- 40 times the population density of the District of Columbia.

Overcrowding is felt most acutely in the housing crunch -- a problem besetting at least half of the population.

While total housing more than doubled since 1949, construction hardly has kept pace with population growth. In 35 years, living space per person increased only slightly to today's average cubbyhole of 2.4 yards by 2.4 yards, according to section chief Sun Laiyun of Shanghai's Housing Management Bureau. Tiny Living Quarters and Mountains of Waste

Most of Shanghai's houses are exhausted, one-story cubicles made of brick and wood. They are set at the edge of narrow, twisting lanes congested with vegetable carts, bicycles, trucks and every form of curbside activity -- people brushing their teeth, cooking dinner on coal braziers, sawing wood, washing clothes, cutting hair or slurping bowls of noodles.

There is no zoning here, and some residential quarters share space with polluting factories or stinking mountains of industrial waste piled four stories high.

Raw sewage leaks into the streets of Shanghai's older sections, overflowing septic tanks and pre-1949 sewer pipes that are grossly inadequate for the city's burgeoning domestic waste -- now 8,000 tons per day.

Most homes have little space for anything but beds. With three generations often sleeping in a single room, families build makeshift lofts. They balance planks of wood between two tables at night, improvising a bed. Still, many have to sleep on the floor.

Up two flights of creaky, steep stairs, the Fang family lives in an attic so tiny that the 78-year-old grandmother has to sleep in a bamboo chair on summer nights when it gets too hot to bed down with other family members.

No bigger than some walk-in closets, the 9-by-9-foot room in the Pleasure Gardens section of Shanghai is home for the old woman, her daughter and two teen-age grandsons who have to stoop to avoid banging their heads on a ceiling that slants to as low as five feet from the ground. Their father has lived in a factory dormitory for 10 years for lack of space at home.

The attic is a study in sparseness -- a little dining room table, chairs piled on top of chairs, a single dresser drawer and a wire strung across one wall over which clothes are hung.

Middle-income earners, the Fangs could afford rent much higher than the 50 cents they now pay to the city every month. But there simply is no housing for them.

What housing there is in Shanghai lacks the basic amenities taken for granted in other major cities of the world.

Housewives walk a block or more to draw water from public spigots, lugging heavy buckets or balancing them on bamboo poles. They cook on rudimentary coal stoves in communal kitchens or outdoor corridors clouded in coal dust.

Most Shanghainese bathe in little pans of heated water at home or go to crowded public bathhouses, where scores of people wade in large, collective tubs.

Without home toilets, they use wooden chamber pots kept under beds or in a corner of the room behind a curtain.

This bathroom arrangement is a sore point to Lu Peifang, 38, a petite electrician who lives in a small room off China Prosperity Road with her husband, their son, 17, and daughter, 14. Whenever nature calls, she said, she asks everyone to leave.

"It is embarrassing to pull out a chamber pot in front of guests or a grown son," she explained.

There is literally no word for "privacy" in Chinese, and any Shanghai neighborhood shows why. The housing crisis packs the community so tightly that people have difficulty separating their lives. It slashes through all levels of society, pitting neighbor against neighbor in quarrels over communal space and forcing students into the street to do their homework under dim streetlights for lack of space or quiet at home.

Some families stake out individual territory within a single room simply by dropping bedsheets from the ceiling to the floor.

"You can hear my son and his wife kissing, my father-in-law coughing and the youngsters listening to the radio all at the same time," said a 61-year-old man whose family practices the bedsheet subdivision system.

Once they leave their residential warrens, Shanghainese have to cope with overcrowding on an even larger scale.

Just getting to work can be a nightmare. Buses, the main form of mass transit, turn into a free-for-all wrestling match every rush hour as 1.8 million commuters fight for 600,000 total spaces in unventilated, low-ceilinged vehicles lined with a narrow bench on each side.

Transit planners allot bus space according to the number of shoes that can fit safely into 10 square feet of bus -- a maximum of 18. At peak times, however, the shoe count reaches 22.

"Some people have to stand on one foot," said Wu Weixian, vice manager of the Shanghai Transit Co.

When the No. 45 bus pulled into a downtown stop one recent morning, 50 anxious commuters broke for the door, shouldering their way forward before passengers could get out. Two girls trying to disembark, elbows flying, finally slithered down the backs of onrushers and fell to the ground. Everyone else kept leapfrogging, shoving and pressing for the small opening until the bus drove off, leaving a few would-be riders holding on to the door for life.

The Huangpu River ferry linking outlying residential warrens to the inner city gets so crowded during rush hour that riders cling to the outside rails as the boat moves.

Mass transit woes extend to all levels of society. Female passengers complain of being fondled, elderly riders fear pickpockets, and everyone reports to work jostled.

Almost all jobs are assigned by the city government, which tries to find work for people near their homes. Still, workers spend an average of 90 minutes and up to four hours every day commuting on buses, Wu said.

Western economists believe Shanghai has a 10 percent unemployment rate despite heroic government efforts to find work for 1.4 million new job seekers since 1979.

Finding jobs for 278,000 people a year has led, moreover, to tremendous featherbedding and declining rates of labor productivity, according to Chinese and western specialists. Some experts say that every job in many offices and factories is being filled by at least two workers.

"There are a lot of factories where workers do nothing," said Marwyn Samuels, a visiting economic geographer from the University of British Columbia.

He said a continuing process of automating the textile industry has reduced lines of 150 workers to 20 or 30. But the excess laborers remain on the payroll.

Despite this labor surplus, 15 percent of Shanghai's industrial capacity is idled because of power shortages and new factories have to wait up to two years for electrical hookups, utility officials say.

Like most problems here, the energy shortage is exacerbated by too many people. Although electric generating capacity has increased 25 times since 1949, Shanghai's population explosion and its growing demand for appliances have neutralized much of the gain.

Still, Shanghai, building on its pre-Communist base, is the industrial powerhouse of China, churning out one-sixth of the nation's exports and one-ninth of its total industrial value in 1983.

Its labor force of 5 million is the nation's largest, best paid and most skilled. The Shanghai label is widely coveted throughout China.

Shanghai's industrial prowess, however, carries a heavy environmental price tag. As a center for huge oil refineries and chemical and metallurgical plants, it also is home of the "yellow dragons" -- local slang for the sulfurous clouds that pour out of factory smokestacks.

Blanketed by a gray, acrid haze, the city wheezes from the tons of soot released every day by coal-burning stoves. Almost 60 percent of city residents cook with high-sulfur coal for lack of gas hookups.

The Huangpu River, Shanghai's source of drinking water, is a vast, open sewer, contaminated by daily discharges of almost 4 million tons of untreated industrial and domestic waste, including unacceptable levels of mercury and phenol, according to Environmental Protection Bureau spokesman Cao Dexing.

The river is a fetid, brownish pool whose main tributary -- Suzhou Creek -- is anaerobic.

Seven of the city's eight water pumping stations are located downstream close to raw sewage outlets, Cao said, and the pollution content rises dramatically every summer when irrigation upstream siphons off relatively clean water before it can dilute the poisonous wastes.

Every glass of water bears the pungent odor of heavy chlorine and must be boiled before drinking. Vegetables irrigated by polluted water often contain high levels of hard metals dumped into the Huangpu by more than 8,000 factories.

Although Shanghai has taken initial steps to curtail pollution, they hardly make a dent. The seven municipal treatment plants, for example, can handle less than 10 percent of the city's daily discharges.

Public health officials blame pollution for Shanghai's unusually high cancer mortality rate, which is twice that in other parts of China. Lung cancer deaths have doubled in Shanghai in the past 30 years as the number of industries multiplied.

Of every 100,000 Shanghai males, 55 died in 1983 of lung cancer and 56 of stomach cancer, according to officials. In New York City, the rate for lung cancer was 17 per 100,000 and for stomach cancer, 9 per 100,000.

"We believe pollution causes more disease in Shanghai than any other single factor," said Dr. Cai Baoxian, deputy director of the Shanghai First People's Hospital.

Other environmental diseases -- typhoid, dysentery and hepatitis -- still strike tens of thousands of people a year, straining an overburdened medical system, which, according to Cai, provides only one-third of Shanghai's public health needs.

Each of the 100 outpatient clinic doctors at Cai's hospital sees at least 45 patients daily, allotting every sick person an average of six minutes.

There are 60,000 hospital beds in Shanghai, but only 7,300 are considered well equipped -- one for every 1,600 people -- and hospital wards jam eight patients into a small room with less than five square yards each, Cai said. The city's total medical personnel of 20,000 -- doctors, dentists and all other specialists -- amounts to just two-thirds of New York's for 50 percent more people.

There are just 363 psychiatrist staff workers and 3,500 psychiatric beds for a city of 12 million.

While the number of dentists in Shanghai greatly exceeds that in other parts of China -- the nationwide average is one dentist for every 170,000 people -- dental care here still falls painfully short of demand.

Only those with dental emergencies can afford the time it takes to see a dentist, Shanghai residents say. People begin to line up in the dark hours before the office opens, then spend another 90 minutes or so registering and waiting for their turn.

Waiting in line, however, is part of life in Shanghai. Housewives go to state markets at 5 a.m., placing a basket in several lines to mark their place as they hop from vegetables to fruits to cooking oil.

A haircut at one of the city's better barbers can take 10 hours of waiting in the holiday season.

When stores advertise that they will have color televisions for sale on Wednesday, the line begins to form on Monday. Family members take turns waiting.

Shanghai is a city of great shortages. There are shortages of nurseries for children, of eateries, of cinemas, of outbound trains (they reportedly hold twice their capacity on holidays) and of educational opportunities -- only 60 percent of junior middle school graduates go to upper middle school, and just 4 percent of college-age people go to college.

A Chinese tourist or salesman looking for a rare hotel room may end up spending the night on a cot in a public bathhouse or in a barber's chair for 15 cents a night. A Kingdom of Scarcity

In this kingdom of scarcity, he who dispenses objects of value is king, and corruption is the norm. It is institutionalized in a government bureaucracy in which housing officials take bribes for apartments, utility officials demand favors for gas hookups and state factory bosses trade their best bicycles or televisions for something they want for themselves or their families.

Some multistory apartment complexes have remained unoccupied for months because electricians refused to wire them until they were assured of apartments for themselves, according to the housing bureau's Sun.

Under-the-counter deals pervade all levels of society. A network of personal connections called guanxi dominates even the simplest transactions. With good guanxi, one can "go through the back door," which means one can obtain valued goods or services through unofficial channels.

The guanxi system is a kind of mutual aid society based on an exchange of favors -- "the only way to get something done," in the words of a 61-year-old intellectual here.

A vegetable salesman saves the freshest cabbages for a movie ticket vendor, who, in turn, provides good seats for popular movies.

A teacher of Japanese language gives free tutoring to the son of a housing official and receives a new apartment in return.

An electrician, working overtime, wires the house of a hospital official in the hope of getting an introduction to a good doctor if he gets sick.

Despite its prevalence, most people consider the guanxi system a necessary nuisance.

"There are too many people in Shanghai and not enough goods to go around," explained an elderly intellectual. "There's a constant pressure to find a back door. If you don't, you can end up with nothing."

China's central government believes the best way to eliminate the pressure is to eliminate shortages. To that end, it has increased the supply of consumer goods and services, built new housing, opened more schools and added mass transit facilities. But Peking believes a more lasting and efficient cure for shortages is to cut demand -- a goal of population control.

"It's a good thing there's a department taking care of family planning," Sun said. "Otherwise, this city would be out of control."

Next: China's birth control policy