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It just gets easier and easier to do things in Mainland China. During my last trip, I broke down and purchased a China Mobile prepaid SIM for use during my visit. It makes things a lot easier when you're out there.
It was a lot simpler to buy a SIM card than it was before. Here's what you need to do:
1. Find a China Mobile (they have better coverage) store.
2. Walk inside and ask if someone can help you in english (对不起，你会说英文吗?).
3. Bring Passport and unlocked GSM phone; the former to register your SIM card and the latter so the staff can test it out for you.
It really was that easy. Here's a site with more detailed information. It's a couple of years old, but the information is still valid.
I ran the SIM card on my unlocked Nexus One. Phone calls and SMSes went through fine. I was able to purchase a data bucket to run Google Maps, the internet, Foursquare and most importantly, Google Translate! For standard GSM phones however, you will be running on EDGE. If you're wanting 3G speed, I've read conflicting reports that China Unicom has a prepaid 3G service. Unlike most prepaid service in Asia, you can't punch in a USSD code to pull up your balance or to purchase services. You need to call 10086 and press 2. Service is 24 hours and their English speaking staff is pretty good.
One more thing; Boingo Mobile works with a lot of the pay-hot spots around Shanghai. So if you have that service, you can always save your data by logging onto Wi-Fi.
So, the moral of the story is: be adventurous and ask! Usually people will be nice enough to be helpful, especially if you try to speak Putonghua. Which I can't.
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