I think the reason why they choice Shanghai is simply because the Chinese tourism industry is HUGE. When we lived there, there were a few times in a year that almost everyone would be off on a month break. An entire MONTH. Traveling is expected (people go to their hometowns/vacation), but it is horrendous. There is a good portion of their tourism that they loose to different countries.. such as Thailand and even Japan. Tourism to HK is not being promoted, or at least, wasn't really in the past year. Since the umbrella movement and wanting to elect their own officals, its more of an eye sore.. where the goverment was being extremely stingy with wanting to give out passes to get from mainland china to hong kong to start with. So, it makes sense that they want to control some kind of Chinese based revenue, with a force that has only grown.
I really feel they would have been better to build in Singapore. It's very clean. They have strict laws on litter and decency.. plus, It's got Universal studios! But alas.. it lost out, because it's not.. China and it's not as of a hot spot at Shanghai.
The other thing.. I've seen the relieving themselves in the streets. Almost always with children. It is not only the cost of diapers that this is the thought to circumvent (children's pants are split down the middle for THIS purpose), but early training. The reason why it is not done in the restroom is not because they are pay or they aren't available (I've never seen a pay toliet the entire time I lived/traveled there.. and we lived in non-westernized area).. but because most of the time, there isn't thought to be enough room. Toilets are basically holes in the ground with spaces to put your feet. You can fit two people in there, but it's tight.
The littering thing also seems to be very cultural. In the town we lived, people had no problem tossing trash out into the street.. not even making it into the garbage can. Why? Because there was always someone there to clean up after them.
I have no explanation for the graffiti, though that is also a common problem with tourist. Not to long ago there was a story about a Chinese tourist that had defaced a pyramid in Egypt much the same way..
One of the major things I worry about is the swormage.. .. Really, getting into a line and waiting one's turn is not a thing over there. People will often push and shove infront with their money to jockey for position to be first. . Makes me slightly afraid for the CM's.