Let's get some facts straight first. Air China is a four star rated airline (same as BA and Virgin) - http://www.airlinequality.com/Airlines/CA.htm
Second, Air China doesn't fly non stop from the UK to Shanghai. It serves Beijing only. So you're either on a non stop code sharing with China Eastern (the only PRC carrier that flies LHR-PVG), or that's a one stop via PEK.
Thirdly, what are you comparing £1,300 against? If China Eastern (MU) themselves are cheaper then why not book directly with MU? Also look at one stops, either via Europe or on Asian carriers via Asian gateways. I would personally be looking at doing that route via Incheon on Asiana (a 5 star carrier and imo the best).
Don't forget, the PRC market is still regulated with relatively only a small number of flights. If you're going in April, that's not that far out and the cheaper fare buckets may simply have sold out.