Local Guide
For more local info I recommend the excellent Utopia Asia Guide

Beijing 
Bar
Dushi Qingdao (Love Island in the City)
Liu Lichang, HePingmen, XuanWu District, 6318-0295.
Local crowd is a mix of young, mature, and chubs. Drag shows every weekend.

Shanghai
Eddy's Bar
1877 Huaihai Zhong Lu (opposite Wu-Kang Mansion and next to the Hao De mini-mart on the corner of Tian Ping Rd)
Tel: 6282-0521, 136-6183-8797, email. Latest incarnation of one of Shanghai's longest operating gay clubs. World-class club design (this could be New York, Milan or Paris) with red lighting and Chinese modern decor. Especially good music mix with world flavors and not too loud to kill conversation. Crowd tends to be more mature, upscale, and a blend of locals, expats and visitors. Lesbians and women-friends of gays are also welcome. Reasonably priced, cash only (no credit cards).

Lai Lai Dance Hall
235 Anguo Road (near Zhoujiazui Road, in northeastern Hongkou district, five minutes from #4 line's Linpin Road subway stop.)
Fri,Sat,Sun 7-9:00 pm,
Contact Min Min,131 2791 4456, 150 2174 7399 (Chinese only),QQ no.: 439975834, min.min68@yahoo.com (Chinese or English inquiries).

Guys, come dance the waltz, jitterbug, rumba and two-step, with another guy! Now in its seventh year of holding gay ballroom dances (part-time), the Lailai Dance Hall (mentioned in the video "Gay Shanghai") is a place where middle-aged (and older), working class (and mostly married) men come to be gay for a few hours each week. After the dancing ends many go for further conversation in a park near the Xiahai Temple, or to a restaurant at 88 Zhapu Road.

On Thursday, May 1---the May Day holiday---the dancing will be followed at the dance hall by an hour-long drag show where men will sashay around as Las Vegas show girls, or perform female Shanghai opera parts, or Yue opera (and thus men imitating women, imitating men), or traditional Beijing opera heroine roles, or even do 1960s revolutionary opera female roles. They sing, typically, not-so-modern songs, with their real voices (not lip sync). Such camp, a welcome relief from "clone" gay bar fare, shows the rich, home-grown gay culture of China's Yangtze River delta---a transvestite extravaganza with Chinese characteristics. It's La Cage Shanghai / Priscilla of the Pearl of the Orient (...The East is Pink)