A New Year's stampede on Shanghai's historic waterfront killed at least 36 revellers and injured dozens more, mostly women, as one police officer said fewer personnel than at previous events were securing the area.

While some witnesses said partygoers had scrambled for fake money thrown from a building, others said this was unlikely to have been the main cause and huge crowds were to blame.

Chinese President Xi Jinping demanded an immediate investigation.

The disaster, centred on a wide stairway leading up to a riverfront promenade, happened shortly before midnight on Wednesday as people packed the Bund area to usher in 2015.

The tragedy was a "wake-up call that the world's second-largest economy is still a developing country which has fragile social management", the official news agency Xinhua said in an unusually critical commentary.

"People were screaming, women were screaming and people started jumping off the staircase to get clear," said a Shanghai resident who gave her name as Sarah.

"There was quiet, and then people on the stairs fell in a wave and people started to get trampled," Sarah, a Singaporean national, told AFP.

People carried the dead and injured through a gap in the crowd as flashes from emergency vehicles and revellers' light sticks lit up the night, mobile phone video footage viewed by AFP showed.

American Andrew Shainker, an English teacher, posted on Chinese messaging network WeChat: "I witnessed lifeless bodies being carried out of a crowd one by one and dumped on the street.

"You could hear screams of panic. What I thought was the best view on the Bund ended up being a front row seat to an international tragedy."

"I felt I was suffocating," wrote one person posting on Weibo, the Chinese equivalent of Twitter. "Some people with us will not come back."

- Fewer police present -

City officials said 36 people were confirmed killed and 47 injured, 13 of them seriously. A Xinhua report late Thursday said seven of the injured had checked out of hospital.

Earlier, Xinhua said that among the dead was a Taiwanese, and that 25 of those killed were women. It added that the first 10 identified fatalities ranged in age from 16 to 36.

A Malaysian student at a Chinese university was among the dead, Malaysia's foreign ministry said.

Another Malaysian and two Taiwanese were among the injured, the Shanghai government reported.

The Bund, renowned for its colonial architecture, is the former financial district of China's commercial hub and now a popular tourist destination, packed with high-end restaurants and expensive boutiques.

Shanghai residents have traditionally flocked there to celebrate New Year, and more recently the district government has staged official celebrations.

This year's "countdown" included a light show, performances and fireworks.

It was scaled down and moved to a new location specifically due to concerns about overcrowding after nearly 300,000 people turned out to see the spectacle last New Year's Eve, the Shanghai Daily said.

Senior officer Cai Lixin acknowledged there were fewer police than for some previous events.

"Yesterday, there wasn't an event, therefore we didn't arrange for as many officers compared to something like last year's National Day celebration," he was quoted as saying by the government-linked Shanghai news portal Eastday.com, in a comment later apparently deleted from the website.

Shanghai television quoted authorities as saying a "more than normal" 700 police officers were present but more revellers than expected had shown up.

In its report late Thursday, Xinhua quoted Cai as saying some 500 police were mobilised after a surveillance camera showed a passageway near Chen Yi Square was congested after 11.30 pm.

Police forced their way into the heart of the crowd and found some people had "physical discomfort", he was quoted as saying.

Xinhua also stated that police "expressed regret over their failure to effectively intervene" when the flow of people "increased irregularly" at 11.30 pm.

- 'My wife is dead' -

Both Sarah and Shainker were in Bund 18, a shopping and entertainment complex where witnesses said dollar-like notes had been thrown from a window, prompting a scramble to retrieve them.

But others pointed out that a wide street separates the building from the staircase where the main crush occurred.

Pictures posted online showed the slips of paper were a similar size, shape and colour as US currency, but emblazoned with the logo of M18, a nightclub, and stamped "New Year 2015".

Xinhua said Thursday that surveillance footage showed the notes had been thrown after the stampede, at 11.47 pm, citing the Shanghai police official microblog.

Shanghai television said authorities were investigating the money-throwing incident, but attributed the cause of the accident to people slipping and falling in the crowded conditions.

The plaza where the accident took place is named for Shanghai's first Communist mayor Chen Yi, and mourners laid flowers at his statue Thursday.

Large numbers of police were stationed in the area Thursday and a nearby subway station was closed for safety reasons, Xinhua said.

One young man emerged from the Shanghai Number One People's Hospital, where most of the injured were taken, telling AFP: "My wife is dead."

Most large gatherings in China are carefully controlled but there have been other incidents in which overcrowding has caused deaths.

Chaos and screams at Shanghai New Year stampede
Shanghai (AFP) Jan 01, 2015 - Shanghai's joyful New Year celebration ended in screams, panic and chaos as a stampede enveloped a crowd of revellers so dense that emergency services were initially prevented from helping.

American Andrew Shainker, who teaches English in the city, spent New Year's Eve on a restaurant terrace overlooking the pandemonium centred on a stairway leading up to the Bund, a riverfront promenade.

It "looked from above as if people were getting crushed as more and more people came from all directions", Shainker wrote on Chinese messaging service WeChat. Mayhem ensued.

"There was a large flow of visitors, some trying to reach the viewing deck and some trying to get down," Zhou Miaochen, another witness, told AFP.

"People started crashing into each other."

Confusion reigned and a video seen by AFP showed a handful of police officers trying to subdue a surging, densely-packed crowd of tens of thousands, to no avail.

"People were screaming, women were screaming and people starting jumping off the staircase to get clear," said a Shanghai resident who gave her name only as Sarah.

"There was a quiet, and then people on the stairs fell in a wave and people started to get trampled."

The official Xinhua news agency quoted a woman surnamed Yin saying: "We were caught in the middle and saw some girls falling while screaming. Then people started to fall down, row by row."

She used her arms to try to protect two children in front of her and her son followed her out, Xinhua said. When he emerged, she said tearfully, he was bruised, cut on the neck and bleeding from the nose and mouth.

As the screams pierced the festive atmosphere, Sarah -- who is Singaporean -- said she saw police desperately trying to get the situation under control, yelling into walkie talkies.

Officers tried fruitlessly to resuscitate a lifeless body, Sarah said as she choked back tears, saying it was the first corpse she had ever seen.

Some, including foreigners, rushed to pull people to safety and perform emergency resuscitation, Shainker said.

"I witnessed lifeless bodies being carried out of a crowd one by one and dumped on the street. Each body had around 4 people carrying it," he wrote on WeChat, adding most of the victims appeared to be Chinese.

"They tried their best to create a ring of protection around the bodies."

But many people, he added, "stood or walked by and did not want to be responsible".

Two ambulances arrived after about 30 minutes but were overwhelmed by the sheer number of dead and injured, he said.

"It was impossible for emergency services to get in there given the people and chaos," Shainker, 28, told AFP.

At least 36 people were killed and 47 injured, according to city officials.

"What I thought was the best view on the Bund ended up being a front row seat to an international tragedy," Shainker wrote in his posting.