But it looks like Shanghai still has a long way to go to shake up Hong Kong and indeed, if anything, partly because of rapacious landlords, a disastrous stock market, unscrupulous financiers and bad planning, the city has slipped back instead of moving ahead of its capitalist cousin on the Pearl River Delta.

In fact, Shenzhen, the formerly grimy industrial city cheek by Hong Kong's jowl, has been working on its own transformation into a regional financial center, pushing through an 18-part package of financial regulations two years ago to ``pit itself against Shanghai'' as a financial center, according to a People's Daily article.

After years of promises, an ebullient Shanghai government a year ago unveiled an ambitious blueprint to return the city to its former international financial glory. A major focus of the plan was to restore the collection of magnificent art deco buildings along the Bund beside the Huangpu River as Asia's Wall Street - a proud title it gained in the 1930s - to attract multinational financial institutions.

It is early days, and Shanghai may yet one day surpass Hong Kong as a financial center. But a year later, municipal authorities have found little progress. Securities brokerage houses have not rushed in as hoped to boost the Shanghai stock exchange. The financial sector's contribution to Shanghai's gross domestic product has actually decreased instead of growing.

On Tuesday, at the opening of the annual session of the Shanghai municipal people's congress, mayor Han Zheng only briefly reaffirmed the goal of building a financial center in a 31-page work report to city legislators, mentioning no concrete measures, according to Business Watch, a Beijing-based magazine.

Instead, the Bund, after a year of development, is a magnet for global name-brand goods, luxury restaurants and entertainment venues, giving it more of Fifth Avenue's cachet than Wall Street.

Overseas investors, particularly from the United States, Singapore and Hong Kong, have invested in high-end shopping centers and entertainment places in landmark buildings such as the old-time headquarters of what was once known as the Hong Kong and Shanghai Banking Corporation.

These developments reflect that the Shanghai government is in an awkward position. In its plan, the municipal government said the financial sector's contribution to its GDP would grow to 18 percent this year. This aim now looks hard to achieve, if not impossible.

In 2002, the financial sector contributed 10.8 percent of the city's GDP. In 2003, the figure dropped further, to 10.1 percent. GDP growth in 2003 was 11.8 percent at a time when the financial sector grew by only 7.6percent. It is widely expected that the financial sector's contribution to Shanghai's GDP last year will continue to decline, taking into consideration Beijing's austerity policy to cool down the economy and the stock markets' worse-than-expected performance.

Indeed, the mainland's markets were among the world's worst performing last year, with 150 billion yuan (HK$141.09 billion) wiped off the value of domestic shares.

With the city still chasing its financial center dream, skyrocketing property prices appear to have driven out potential investors. In the third quarter of last year, property prices in urban downtown areas averaged 12,000 yuan per square meter. That has driven factories out of the city to nearby Jiangsu and Zhejiang provinces so as to keep their competitive edge.

So while Shanghai was a capitalist powerhouse prior to the communist takeover, it is still struggling to regain its equilibrium. And Hong Kong, with its strong infrastructure, its sanctity of contract and rule of law and its relatively transparent corporate governance, still has a few more years to go at the top.