Fudan University economist Zhang Jun found himself in hot water recently after newspapers reported he advocates Shanghai becoming a new special administrative region like Hong Kong.

In a telephone interview with China Daily, Zhang said he was not talking about what some netizens described as "one country, two systems" for Shanghai.

"What I really mean is that there should be a breakthrough in transforming government functions," he said.

Zhang, director of the China Center for Economic Studies of Fudan University, believes that unlike other provinces, Shanghai's government should not be pushed into meeting a set GDP target.

Without that burden, Shanghai can focus on developing even more into an economic and trade center and an international city, according to Zhang.

"If city leaders are assessed only by GDP growth, they will hold onto those projects that contribute to GDP growth and will not allow them to go to other provinces," said the economics professor.

Local government leaders often tout GDP growth as a sign of success. To pursue a higher GDP growth, Shanghai and other Yangtze Delta cities have waged a tough battle to compete for large foreign investment projects, despite the fact that the service industry is widely regarded as the future of Shanghai.

Zhang said what he advocates is that Shanghai's government should no longer steer the economy and engage directly in attracting foreign investment, implementing projects and boosting GDP. Rather, it should learn from the Hong Kong government.

He cited a number of areas in which Shanghai could learn from Hong Kong, such as a freer and more flexible financial system, legal practices that meet international standards, better supervision and anti- corruption mechanisms.

Zhang believes that freer and more flexible policies for Shanghai will be vital to the future of the metropolis.

"While China's administrative system is not likely to change for the moment, Shanghai could take the lead to make a breakthrough," he said.

Zhang made his ideas known after serious concerns were voiced by local officials and economists about the future of Shanghai and what the city could rely upon after the 2010 World Expo and incessant investment-driven growth.

He also based his assertions on Shanghai's international past and its strong ability to learn from the outside world.

source: China Daily