Since the last decade, the Shanghai government has carried out administrative reforms towards the goals of rationalisation and marketisation. Various reform measures have been implemented, including, for example, segregation of government and enterprises (zheng qi fen kai); reduction of administrative examination and approval (jianshao xingzheng shenpi); and devolving some of the government functions to the third sector. Among various measures, probably the setting up of a new local government in the Pudong New Area is the most significant. After the examination of different aspects of the Shanghai administrative reforms, we conclude that the goal of the reform has been set correctly but without enough bold and innovative attempts. We suggest that further administrative reforms in Shanghai should be implemented with more rationalisation and marketisation in order to build up a true market economy without administrative interference from the government.