The second largest city in the world is not a straightforward answer as it can be measured by different criteria such as population, area, or economic output. However, the most common way to measure the size of a city is by its population as it reflects the number of people living within the city limits. Based on this criterion, the second largest city in the world is Shanghai, China.

**Shanghai - Overview**
Shanghai is located in eastern China, at the mouth of the Yangtze River, and is a global financial center and transport hub. It has a population of over 24 million people, making it the most populous city in China and the second most populous city in the world after Tokyo.

**Factors contributing to Shanghai's population**
- Migration: Shanghai has been a destination for migrants for centuries due to its strategic location, rich history, and economic opportunities.
- Economic growth: The city has experienced rapid economic growth since the 1990s, attracting people from rural areas and other parts of China to seek employment opportunities.
- Urbanization: As China continues to urbanize, more people are moving to cities like Shanghai for better living standards and education opportunities.

**Challenges faced by Shanghai**
- Overcrowding: The high population density in Shanghai has put a strain on the city's infrastructure, resulting in traffic congestion, air pollution, and limited space for housing and public services.
- Economic inequality: Despite its economic success, Shanghai still faces significant income inequality, with a large wealth gap between urban and rural residents and a lack of affordable housing for low-income families.
- Environmental degradation: The city's rapid development has also led to environmental degradation, including water pollution, soil contamination, and destruction of natural habitats.

In conclusion, Shanghai is the second largest city in the world by population, with over 24 million people living within its borders. While the city has experienced rapid economic growth and development, it also faces significant challenges such as overcrowding, economic inequality, and environmental degradation.