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Management Science and Research
June 2014, Volume 3, Issue 2, PP.45-49
China (Shanghai) Free Trade
Administration Reform Experimental Zone Innovation Research
Fan Qu
#
, Zhenxi Liu
School of Economics & Management, Shanghai Institute of Technology, Shanghai, 201400, P.R.China
#Email: 582244036@qq.com
Abstract
Based on the analysis of different types of Special Economic Zone and the review of relative reference, the paper summarizes
three types of executive management mode. Then through the further study of administrative mode two-tired, coupled in
Shanghai Pudong Free Trade Area, the paper discussed the construction of management mode and has given theoretical
explanations to it. Finally, the evaluation criteria of the new district governments performance have been discussed. Our paper
provides reference for the urban development zone to improve administrative efficiency and reduce administrative cost, as well as
the discussion on the audit evaluation criteria of government performance.
Keywords: Top-Level Design; One City, Two Systems; Coupled Mode; Low-Carbon Administration
1 INTRODUCTION
During the past 30 years, the development of Shenzhen marked a new era in Chinas reform and opening up. Wading
across the stream by feeling the way, the city following the development method-doing-pondering-redoing;
Pudong New Area writes a new chapter for the scientific development of Chinas New Special Zone in the past 20
years. Carrying across the river, the city develops by the method of thinking-doing-rethinking
[1]
.
In practice, the phenomenon of the law is different to depend on in the expansion administration of New
Economic Zone and Special Economic Zone (such as Pudong New District, Shenzhen Special Economic Zone),
which results in inefficient administration. In addition, the phenomenon of no laws to abide by from cross-
regional administration leads to high administrative cost.
At present, the administration trisection of Shenzhen which has been kept in silence for nearly 10 years restarted
[2]
,
and people wait for the result anxiously. In 2005, referring to the operation mode of two cities, the Pudong New
District promoted the project of district-town linkage, which resulted in unknown compartmentalization,
duplication, conduction block, the functions of absence(Yu Lerui, 2006); In 2007, the Pudong New District
cooperated with Capgemini Group in the area of carding government business process and research on outsourcing
services. In 2009, there is a great earthquake in Chinas metropolis circle: Chengdu New Area, Pudong New
District, Shenzhen Special Economic Zone and the Tianjin Binhai New Area have risen to national strategy; As
the pilot for major metropolis circle, the New Economic Zone and Special Economic Zone adopt different
development mode due to different locations, like Chengdu New Area to Sichuan, Chongqing, Binhai New Area to
Beijing, Tianjin, the Pudong New District to Jiangsu, Zhejiang and Shanghai , Shenzhen Special Economic Zone to
Guangdong, Hong Kong and Macao
[3]
. Based on the background of cross-jurisdiction, cross-community system
(Hong Kong, Macao and Taiwan), the discussion of administrative management mode of the New Economic Zone
and Special Economic Zone in the national strategy level is the new topic of this paper.
2 LITERATURE REVIEW
Academically, on the basis of the research of Special Economic Zone and the Chinas mode by academic
community in recent years, several major research paradigms have been formed in references existed.

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2.1 Administration Trisection
The main content of administration trisection is that the administrative management function will be divided into
three parts, decision-making, implementation, and supervision
[4]
. The three parts are inseparably interconnected,
mutual restraint, mutual coordination on a relatively isolated basis. (Ma Jinren, 2009); The main appearance of
Shenzhens reform is from dance-oriented to limited, from authority administration to service administration, from
rule by man to rule of law, from the sectoral of publicity. (Bian Fanghui, 2003); at the systematic level, with the
power separated from interests, which will lead to no little coffers, the government will be from the sectoral to
the public nature. The implementation of administration trisection will improve administrative efficiency and
reduce corruption. (Li Ronghua, 2003). The reform of administration trisection in Shenzhen took western country
experience as reference. However, there are some drawbacks in practice, such as it is not conducive to creativity,
flexibility in the implementation of policy, it does not help to define their powers and responsibilities, it cannot
ensure the effectiveness of supervision mechanism and increases the difficulty of control in scale
[5]
. In order to
overcome these disadvantages, we should: create new relationship between government sectors, improve the
construction of the external mechanisms of supervision, strengthen legislation and apply business management
experience to control the cost of reform (Wen fang, 2005).
2.2 New Public Management
The most important idea of new public management is to change the government from the role of controller to
coordinator and service provider (Jia Xijin, 2007); horizontal government functions and the development of e-
government played a role in promoting structural transformation of public management (Wang Ming, 2006). The
management model of developed country is in the transformation. In the use of social forces, the public management
is so competitive as to gain high efficiency after introducing market mechanisms. Meanwhile, the service is
enhancing (Mao Shourong, 2007); new public management which has profound economic, political and social
background is the trend and practice model for the reform of contemporary western government
[6]
. From the
philosophical level, new public management theory shows that philosophy has shifted from sole subjective
paradigm to post modernism multi-subject paradigms
[7]
. From the perspective of the unification of logic and
historicity, the specific interpretation for the historical process and reason of the administration management from
traditional bureaucratic administration to new public management, and the analysis of its included philosophical
basis promoted the management model to shift from oneness to diversity, which play an important role in the reform
of Chinese political system (Zhang Changli,2003); new public management theory reflects the trend of the
development of public management. However, as a new paradigm, it is immature for the defects: economy,
managerial, conservatism, customer-centrism, etc (Yu Jianli, 2004).
2.3 I ntegrated Administration Theory
Seashore new districts integrated administration theory advocates that social multi-agent co-participate in the
district management. Concretely, it means developing intermediary organization, improving legal environment,
establishing service platform. In order to solve the problems from seashore new district development, and to promote
the development of economic unification in district, the most important is for each administrative area government to
change its functions
[8]
.
Additional theories are infinite type-combine type-finite type and system of city manager. There are three
modes of America municipal system: system of mayorship and city council, system of city committee, and system of
city manager.
This paper will on the basis of academic research results, on the background of national strategy, base on cross-
administrative region and cross-social system, study the problems and dilemmas facing the administrative
management operation of our countrys new economic district and special economic district, discuss the reasons of
administrations low efficiency and administrations high cost, introduce coupling principle, which is more
important to improve administrations efficiency and reduce administrations cost, initiate the theory of corruption
curbing, transparent and open, sunshine official and green administration to provide suggestion that will protect

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country benefits and promote urban development zone administration develop in a healthy way. For example,
Shanghai Pudong new areas administrative mode of two systems and coupling mode is on following.
3 THE ESTABLISHING OF THE TWO SYSTEMS AND COUPLING MODE IN
SHANGHAI PUDONG NEW AREAS ADMINISTRATION
In order to adapt the need of resource integration effectively with each metropolitan in Pudong new area, it is given
province economic administrative permission on system. When conditions are ripe, direct election system can be
introduced into the legislation and administrator election of new area. Two system and coupling mode
management is executed in new area on system, that means administrative committee and village committee in new
area can carry out flat management pattern to improve function efficiency. The formation of administrative
committee can adjust properly referring to Hong Kong and Macao special administrative areas. The mode of two
system in a city can be tried out in the new area, that means carrying out two administrative management systems in
a city or area. The two systems are old administrative sending system in old area, and new two systems and
coupling mode system in new area.
In order to reduce the range of management, a function part (intermediary organization) is added between
administrative committee and village committee. Intermediary organization can be given right, and two parts can
implement principal agent mechanism using common coupling principle
[9]
. These organizations can exercise
authority according to their given right by administrative committee and change their organization construction
whenever government need. Administrative village that consists of several villages or communities is established
complying with the principle of regional, industrial, humanistic, efficiency and subtotal system. It can be elected by
village committee in a democratic way or by village chief in a direct employment way.
Establishing our new and special governments administrative management pattern of two systems and coupling
mode, it can couple with different areas or different social system. This pattern can extend to two systems in a
district, two systems in a province to guide a new reform wave of administrative management system and
mechanism over sea, over river and over boundary. For example, Beibu gulf economic zone with ASEAN nations
(association of Southeast Asian nations), Urumqi with central Asia, Qingdao with Japan and Korea, Xiamen with
Fujian and Taiwan, Dalian with Russia and Japan.
4 THE THEORY EXPLANATION OF TWO SYSTEMS AND COUPLING MODE IN
SHANGHAI PUDONG NEW AREAS ADMINISTRATION
According to the problems of difficult treatment and week legislation in our cities developing districts, the first thing
is to establish a reform frame of two systems in a city system and mechanism
[10]
, second is to propose our
countrys administrative management pattern of two systems and coupling mode in new and special area, using
system analysis method, along the ways of coupling principle in science and principal agent mechanism in law.
So called two systems in a city is based on the one country two systems theory of Dengxiaoping and the
important thought of three represents, in the guide of sprite-accelerate the speed of administrative management
mechanism reform, accelerate to promote departing of government and market, prefect the base social management
mechanism in our communist partys 18th large report of present Xi, carry out a new reform in new economic areas
and special areas, establish administrative mode of two systems and coupling mode, and build public service
oriented government, to improve administrative efficiency and reduce administrative cost.
Two systems in a city concept has the characteristics of necessary, feasibility, pertinence to our countrys
economic new area and special area, it also has some reference to Socialist Theory with Chinese Characteristics,
two systems in a country in policy, two systems in a city in economy.
Administration efficiency analysis. Coupling in science means two of above two systems combine together using
interaction. Multi-layer electrical conduction method makes energy loss and information distortion, but multi-
channel electromagnetic induction conduction hardly makes energy loss and information distortion
[11]
. Coupling
principle is a manifestation of energy magnetic conduction; it can improve administrative efficiency in the reform of

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administrative system and mechanism.
Administrative cost analysis. West principal agent mechanism is that on the ground of free-selecting, clear property
and authority theory, independent management autonomy that is mainly property right and assignment right is given
to agent, and establish an effective motivation mechanism between client and agent. When this typical commercial
agent system is used in assigning the right and obligation of administrative committee and function area, its main
point is to establish administrative three parts principal agent lawful mechanism
[12]
. First is the constraint
mechanism of function area. Commercial agent has the advantage of unsymmetrical information, so it also has the
possibility to abuse principalship. In the mode of administrative committee-function area, the indivisibility of
public property right requests anybody has no residual claim right, except government or country, so rigorous
constraint mechanism must be established that function area can performance agent obligation wholly. Second is
motivation mechanism of function area. Government agent has its compulsiveness, has no exit mechanism to choose,
result in that government always damages agent organizations or individuals benefits, so motivation mechanism
that can embody governments trust and ensure positive agent behavior must be established. Third is prevention
mechanism for the administrative corruption. In the impact of emphasis motivation mechanism, corruption
prevention mechanism that will containment motivation to commercial benefit of government, avoid money power
exchange and corruption must be established to improve complementary mechanism reform, and to advocate the
theory of corruption curbing, transparent and open, sunshine official and green administration
[13]
.
5 THE EVALUATION STANDARD DISCUSSION OF GOVERNMENT PERFORMANCE
AUDIT IN SHANGHAI PUDONG NEW AREA
The Audit evaluation standard of Shanghai Pudong new area Government Performance is a systematic engineering.
Because Government Performance Audit has many object bodies, such as financial expenditure budget of
government department, major project and special engineering expenditure, fund expenditure, and the state-owned
enterprise investment expenditure. So the establishment of Performance Audit standard must be divided by
categories, according to different audit objects.
How to formulate the evaluation criteria of administrative efficiency to construct the audit system of government
performance in urban development zone?
It depends on the characteristics of the audit evaluation criteria of government performance
[14]
. The criteria are non-
absolute, non-unitary and time process. Thus, we should follow relevance, operational and scientific principle while
construct audit evaluation criteria of government performance in urban development zone.
With scientific rationality, the audit evaluation criteria is significant to evaluation the government performance in
Development Zone objectively, and to prevent audit risk. Therefore, from the perspective of audit evaluation, the
evaluation criteria of government performance should be divided into three levels: the overall government
performance evaluation criteria, the performance evaluation criteria of governments public sectors and the project
performance evaluation criteria. So the government performance audit evaluation criteria should be designed as
systems engineering.
6 CONCLUSIONS
Based on the background of cross-jurisdiction, cross-community system (Hong Kong, Macao and Taiwan), the
discussion of administrative management mode of the New Economic Zone and Special Economic Zone in the
national strategy level is the new topic of this paper. Based on the analysis of different types of Special Economic
Zone and the review of relative reference, the paper summarizes three types of executive management mode. After
that, this paper discussed three parts: the Establishing of the two systems and coupling mode, the theory
explanation of two systems and coupling mode, and the evaluation standard discussion of government
performance audit in China (Shanghai) Pilot Free Trade Zone.


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AUTHORS
1
Fan Qu, Graduate student, study in
School of Economics & Managent,
Shanghai Insitute of Technology,
Shanghai, P.R.China. Major Field of
study is Regional economics.
2
Zhenxi Liu, Master of Economics in
Nankai University, Professor, works in
School of Economics & Management,
Shanghai Institute of Technology,
shanghai, P.R.China. The thesis
guidance adjunct professor in School of
Management, Fudan University. Main
courses is commodity science, international trade in service,
international marketing, international financial engineering etc.
The major field of study is the development of the Regional
economy and Comparative Economics.