Hi! I usually stay with friends when I go to Shanghai, but from what I've seen and heard most hostels are quite central. Shanghai isn't as big as other cities so getting around between main attractions shouldn't be a problem.
Would you suggest shanghai in china or is there any better city in china to go to?
It depends how long you'll be in China for? If you've only got a few days, I think Shanghai will be a very nice city to visit, especially in the winter. Beijing, for instance, has a very different appeal (and you can get a 'fast' train from Shanghai), but winter may not be the best time to visit because of the horrendous levels of air pollution.