Best options for cash? Exchange or is an ATM available?

Most ICBC, BOC, and other major banks accept foreign ATM cards. (Remember there is a certain extra charge incurred when using a foreign card)

Taxis: do they accept credit cards?

They only accept cash (in Shanghai they also accept the Shanghai Public Transportation Card SPTC, which is used in the subways, buses, etc.) I can't remember if other cities have these kinds of cards?

How common is it for merchants to accept credit cards?

Most hotels and western restaurants accept international credit cards. Call them ahead of time if you want to be sure.