Prior to 1949 and the establishment of the People's Republic of China, what is now People's Square was a course for horse racing owned by the Shanghai Race Club. Gambling and horse racing ceased during World War II and was not permitted to re-commence by the Republic of China government after the war. After the Chinese Civil War, the new Communist government continued the ban and, when the club ran into financial difficulties, took over the grounds and a part of the race course became People's Square, which included a large avenue and spectator stands for use during parades.