Children under 12 will be banned from sitting besides vehicle drivers from March.
The ban is part of the city's new road and traffic management law that was approved by the Shanghai legislature yesterday.
Child safety seats will also become mandatory for private cars carrying children under the age of 4, according to the amendment to the regulation that takes effect on March 25.
"The legislators reached a consensus to add the stipulations in the new law to better protect local children and increase the public awareness," said Lin Huabin, a senior legislator in the Shanghai People's Congress, the legislative body.
The Juveniles Protection Regulation bans children from sitting in the front and also requires the use of child safety seats for very young children, but the regulations are often largely ignored because of a lack of public awareness.
The amendment also bans drivers from using mobile phones or watching other electronic devices while driving, putting the city in line with many foreign countries.
"We found it common for drivers to read short messages or chat on WeChat on their mobile phones, which has become a major threat to driving safety," Lin said.
The new clauses join a raft of offenses that include speeding, incorrect lane changing, not wearing a seat belt and overloading. Offenders face fines of up to 200 yuan (US.80) as well as demerit points.
The amendment has imposed tougher punishment on those who take the demerit points of others. Motorists who ask other drivers to take demerits on their license for them will be fined 500 to 2,000 yuan. Those who take demerits for others will be fined 1,000 to 5,000 yuan and may have their license suspended for up to three months.
Police said the practise of taking demerits for others had become rampant among local drivers because those who tot up 12 points within a year have to take a 7-day training course and retake a driving test to regain their license.
The new regulation also targets a range of infractions as well as promoting green and public transport, said Ding Wei, a deputy director with the legislative affairs commission of the Shanghai People's Congress.
The city's original traffic regulation was made in 1997 and was amended three times from 1999 to 2001. However, the stipulation could no longer meet the management demands with the rising numbers of vehicles and drivers as well as increasing traffic congestion, said Ding.
More than 85 percent of the clauses of the original traffic law have been amended this time, he told a press conference yesterday.
Apart from the tougher regulations, the new amendment bill also focused on public transport development, Ding said. More road resources would be assigned to develop public transport and to make roads more convenient for pedestrians and cyclists.
The legislature had widely solicited opinions from residents, traffic police and drivers, Ding said.
According to Ding, the congress received 132 suggestions via letters, faxes and e-mails during the evaluation on the amendment and took these suggestions into account.