Having done what he could to place Nankin in an efficient state of defense, Chung Wang hastened back to Soochow to resume active operations. It is unnecessary to describe these in detail; but although Chung Wang was twice defeated by a Manchu general named Paochiaou, he succeeded, by rapidity of movement, in holding his own against his more numerous adversaries. In the meantime an important change had taken place in the situation. The peace between China and the foreign powers compelled a revision of the position at Shanghai. Admiral Hope sailed up to Nankin, interviewed the Wangs, and exacted from them a pledge that Shanghai should not be attacked for twelve months, and that the Taeping forces should not advance within a radius of thirty miles of that place. In consequence of this arrangement Ward and Burgevine were compelled to desist from recruiting Europeans; but after a brief interval they were taken into the Chinese service for the purpose of drilling Chinese soldiers, a measure from which the most important consequences were to flow, for it proved to be the origin of the Ever-Victorious Army. These preparations were not far advanced when Chung Wang, elated by his capture of Ningpo and Hangchow, resolved to disregard Tien Wang's promise, and make a second attack on Shanghai, the possession of which he saw to be indispensable if his cause was to attain any brilliant triumph. He issued a proclamation that "the hour of the Manchus had come! Shanghai is a little place, and we have nothing to fear from it. We must take Shanghai to complete our dominions." The death of Hienfung seems to have encouraged Chung Wang to take what he hoped would prove a decisive step.
On January 14, 1862, the Taepings reached the immediate vicinity of the town and foreign settlement. The surrounding country was concealed by the smoke of the burning villages, which they had ruthlessly destroyed. The foreign settlement was crowded with thousands of fugitives, imploring the aid of the Europeans to save their houses and property. Their sufferings, which would at the best have been great, were aggravated by the exceptional severity of the winter. The English garrison of two native regiments and some artillery, even when supported by the volunteers, was far too weak to attempt more than the defense of the place; but this it was fortunately able to perform. The rebels, during the first week after their reappearance, plundered and burned in all directions, threatening even to make an attack on Woosung, the port at the mouth of the river, where they were repulsed by the French. Sir John Michel arrived at Shanghai with a small re-enforcement of English troops, and Ward, having succeeded in disciplining two Chinese regiments of about one thousand strong in all, sallied forth from Sunkiang for the purpose of operating on the rear of the Taeping forces. Ward's capture of Quanfuling, with several hundred rebel boats which were frozen up in the river, should have warned the Taepings that it was nearly time for them to retire. However, they did not act as prudence would have dictated, and during the whole of February their raids continued round Shanghai. The suburbs suffered from their attacks, the foreign factories and boats were not secure, and several outrages on the persons of foreigners remained unatoned for. It was impossible to tolerate any longer their enormities. The English and French commanders came to the determination to attack the rebels, to enforce the original agreement with Tien Wang, and to clear the country round Shanghai of the presence of the Taepings for the space of thirty miles.