Is it acceptable to do an internship with minimal allowance while on a tourist visa in shanghai?

According to law, it is not permitted to do internship or work in China on a tourist visa, however, if the company/unit permits you to do internship and your tourist visa is still valid, you can do it.

hello bruce! Thanks for your reply! Does this mean that as long as the company is aware of this issue (and is even the one who suggested taking the tourist visa), then it would be okay?

You'd better apply for a China business visa to do the internship in China. Nobody can guarantee that you won't be published or held by the immigration office when you exit China if you do the internship with your tourist visa. Of course, there is the possibility that this will be neglected, but you have to undertake the unpredictable risks.