China (shanghai) free trade administration reform experimental zone innovation research

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 government’s 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 China’s 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 China’s 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 “crossregional 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 China’s 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 China’s 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 Shenzhen’s 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 egovernment 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 “Integrated Administration” Theory Seashore new district’s “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 crossadministrative region and cross-social system, study the problems and dilemmas facing the administrative management operation of our country’s new economic district and special economic district, discuss the reasons of “administration’s low efficiency” and “administration’s high cost”, introduce coupling principle, which is more important to improve administration’s efficiency and reduce administration’s cost, initiate the theory of “corruption curbing, transparent and open, sunshine official and green administration” to provide suggestion that will protect - 46 www.ivypub.org/msr

country benefits and promote urban development zone administration develop in a healthy way. For example, Shanghai Pudong new area’s 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 AREA’S 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 government’s 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 AREA’S 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 country’s 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 party’s 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 country’s 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 multichannel 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 - 47 www.ivypub.org/msr

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 organization’s or individual’s benefits, so motivation mechanism that can embody government’s 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 nonabsolute, 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 government’s 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 1Fan

2Zhenxi

Qu, Graduate student, study in

Liu, Master of Economics in

School of Economics & Managent,

Nankai University, Professor, works in

Shanghai Insitute of Technology,

School of Economics & Management,

Shanghai, P.R.China. Major Field of

Shanghai Institute of Technology,

study is Regional economics.

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.

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