The official Chinese figures (from the 2010 census) only include the people who have local ID(hukou 户口), it do not reflect the population of a city.We have conflicting reports of whether Shanghai has more people than Beijing. The official Chinese figures (from the 2010 census) say that Shanghai has more people; apparently some sources (which I haven't looked into) say the reverse. In a situation like this I'm inclined to leave the names alone. This is in accordance with the line in the "Theory" file that says "Do not change established names if they only marginally violate the above rules". (In this case, it's not even clear that the existing name violates the rules.)
The name that 'TZ' uses for the time zone is somewhat arbitrary, and need have nothing to do with the user interface for choosing time zones, which surely ought to be using labels like "北京时间" rather than anything in ASCII.