According to the authorities the stampede was possibly caused by people rushing to pick up fake money thrown from a building overlooking the city’s famous Bund waterfront district.
The crush happened in Chenyi Square in Shanghai’s historic Bund district overlooking the Huangpu river.
The government in China’s gleaming business capital said large crowds started to stampede in Chen Yi Square on the Bund just before midnight in the cosmopolitan city’s worst disaster since 58 died in an apartment building fire in 2010.
Many of the dead are believed to be students, with 25 of them women, state media report.
A man who brought one of the 47 injured to hospital for treatment said fake money had been thrown down from a bar above the street as part of the New Year’s Eve celebrations. People rushed to pick up the coupons, triggering the stampede, said the man, who gave his family name as Wu.
Jenny Chan, 24, visiting from Hong Kong for New Year at Chenyi Square on the Bund, told Al Jazeera: “I was heading up to the viewing platform in order to see the light show. But there were so many people, I couldn’t put my feet down on the steps.
People behind me kept pushing. I could hardly move and I felt as though I was dangling in mid air.
“It was very crowded. I almost couldn’t breathe and I heard someone behind me call for her help, and someone scream. It was a total mess. Someone pulled my hair. I think they were trying not to fall down.
“Someone brought out a loudspeaker and tried to maintain the order. On the ground I could see blood and bodies, and some people’s faces were covered in bruises.
“I’ve never felt so near death.”
Cui Tingting, 27, said she had picked up some of the bank notes but had thrown them away when she realised they were fake.
“It’s too cruel. People in front of us had already fallen to the floor, and others were stepping all over them,” she said.
State television cited others as saying the fake bills came fluttering down “like snow”.
Dozens of people gathered at the scene of the stampede Thursday, laying bouquets of flowers on the ground. Police cars lined an intersection near where the deadly chaos took place.
President Xi Jinping has asked the Shanghai government to get to the bottom of the incident as soon as possible, and ordered governments across the country to ensure a similar disaster could not happen again, state television said.
The Shanghai government said on its official microblog that an inquiry had begun, and that all other New Year events had been canceled.
Photographs on Weibo, the Chinese version of Twitter, showed densely packed crowds of revelers along the Bund where buildings from Shanghai’s pre-communist heyday face the Huangpu River and house upscale restaurants, bars, shops and hotels.
In 2004, 37 people died in a stampede in northern Beijing, on a bridge at a scenic spot, during the Lunar New Year holiday.