Studies and reminiscences, which dissect the communities of the Baghdadi trade diaspora, have so far tended to over-emphasize the smooth Anglicization process experienced by Baghdadi Jews in British India, Singapore and China in the late nineteenth and early twentieth century. The myth of the Sassoons as the ‘Rothschilds of the East’ has, in particular, distorted and enhanced the representation of Baghdadi Jews as wealthy, Anglicized and thoroughly integrated in British social circles. In reality, if we want to unravel the multi-layered history of Baghdadi Jews from India to Japan we must not only analyse in depth the complexities of the westernization process of the Baghdadi upper classes but also reconstruct carefully class divisions within Baghdadi communities. With this aim in mind, this essay will investigate the various strands of identity developed by Baghdadis during their stay in Shanghai and will especially focus on the local allegiances forged between Baghdadi and British settlers, the so-called Shanghailanders. The following pages will, at the same time, delineate the social structure of the Baghdadi community in Shanghai and will indicate that westernized affluent Baghdadis were forced to confront painfully their own ‘other’: destitute vagrant co-religionists who hailed from the Middle East and India and roamed between the various nodes of the Baghdadi diaspora. The period considered in this essay stretches from 1845, the year the first Baghdadi trader set foot in the city, to the middle of the 1930s when large numbers of Jewish refugees from Europe started to flock to Shanghai in search of a safe haven.