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The incident happened at about 11.30am outside the Shanghai World Foreign Language Primary School when a knife-wielding man attacked three boys and a mother, Xuhui district police said in a statement.
Officers arrested a 29-year-old male suspect, identified by his surname Huang, with the assistance of passers-by, according to the statement.
The man told police he was “taking revenge on society” because he was struggling financially, and that he had moved to Shanghai at the start of June but had been unable to find a job.
Police said the two other victims were being treated in hospital but their injuries were not life threatening.
The three boys were believed to be pupils at the school and the woman who was attacked was the mother of one of them, according to witnesses.