Abstract: Transitional China has witnessed three great changes in political orde r, institutional arrangement and productivity, which, as a result of the interac tion between government and society, reflect China's adoption of a unique approa ch called "politics encourages economics". Faced with the fierce reality of so cial interest division and conflict of interest, the Chinese government is suppo sed to shoulder the responsibility of dominating and coordinating the divided in terests in the light of the principle "harmonious interaction between politics and economics".