The Government In The Western Development And Marketing

The discussion on the relationship of the government and the marketis not only a theme in the development of economics but also the centralissue among different schools. This article discusses the relationshipunder the specific environment of west exploration in China. With vast area, West China was the cradle of Chinese civilization inhistory, having a brilliant development history. But owing to the changesof dynasties and frequent wars, especially the destruction of ecologicalenvironment, the economic center gradually transferred from the east tothe south. At the end of the 20th century, China's new leadershipbrought about the strategy of west exploration. This exploration is different from the one at the initial stage of thefoundation of the People's Republic of China. It works in the socialistmarket economy on the basis of some achievements in the reform andopening up. We should not follow the practice of government input intothe west development in the 1960s. Instead, we must stimulate thedevelopment engine of the west areas themselves. Therefore, we mustdeal with the relationship of the government and the market and the issueof the government functions properly. That is the focus of my discussionas well as a practical issue in the exploration. The second chapter of this article reviews the development of thoughtson the relationship of the government and the market in the history ofeconomics. According to mercantilism in the 16th century, the school ofphysiocracy in the 17th century, the classical school, the school ofneo-classical economics, and Keynesian economics, the author concludesthat: both the market and the government may fail in some areas due totheir advantages and disadvantages; therefore, we can not succeed unlesswe select different combination modes for the relationship of thegovernment and the market based on different economic developmentstages. The third chapter compare the west exploration in U.S.A. since 1775with several developments in West China at the initial stage of thefoundation of P.R.C.. The west exploration in U.S.A. started against thebackground of free market economy. The market played a fundamentalrole in the development. With this prerequisite, the American governmentcarried out proper intervention. At the initial stage of the foundation, newChina faced severe international environment and backward condition. Inaddition, the object was "the strategy of taking the development of heavyindustry as the first priority" then. Therefore, as an agricultural economy,China had to implement strong government mode, carrying out highlyintensive planning system. On the two cases, it proves again that theexploration can not succeed unless we choose the proper combination ofthe relationship of the government and the market according to differentstages of economic development and different conditions. The fourth chapter makes a specific analysis of the functions of thegovernment and the market in the exploration. West China has achievedsome success through several developments, but there remains someissues on the definition of the relationship of the government and themarket, such as too much intervention, absence of government behavior,the passion of government investment higher than micro participants, andthe non-standard government behaviors, etc.. This article puts forward amode of "three steps" on the relationship of the government and themarket in the west exploration. The mode of "strong governmentintervention and weak market function" at the initial stage: because themarket mechanism in the west areas has not fully matured, it is necessarybring the government into full play at the initial stage. The governmentshould directly promotes west exploration through the means of financialtransfer payment, policy preference, market cultivation, and systeminnovation, etc.. The mode that "the market takes the leading role while the governmentprovides support" at the middle stage: with the deepening ofmarketization reform in China and the increasing maturity of the marketmech...