A proper treatment of the relationship between government and market is an important guarantee for economic growth and thus a proper understanding of the function of government and market in economic growth from a dynamic perspective presents a leading issue for economic study. As empirical studies have demonstrated, the competitive market between local governments shaped under the reform of dividing power in China acts as a leading dynamo to promote growth of Chinese economy. Again according to the results from empirical studies, however, contributions of competitions between local governments to economic growth began to decrease since 1993, and the existing governmentguiding pattern of extensivetype growth stands just at an inflection point. Therefore, the internal needs of the dynamic evolution of the relationship between government and market cannot be satisfied unless a competitive market between governments is further perfected and a pattern for enhancing harmonious growth is realized.

relationship between government and market; competition between governments; pattern of economic growth