Interaction between the Government and the Market and Enterprise Strategy Realization: Empirical Evidence of China’s Road Confidence in BOE

Abstract

This paper discusses the specific process and mechanism of how the market realizes resource allocation under the guidance of the government and acts on the realization of micro enterprise strategy. After continuous tracking, we find that BOE has actively carried out layout around the national strategy, invested in many places, built production lines, and continuously strengthened innovation investment under the interaction of the government and the market. Through more than ten years of efforts, it has formed a relatively reasonable production line and production capacity layout nationwide, and finally made outstanding achievements in market, technology, brand, export and global competitiveness.Based on the theoretical tools of the relationship between the government and the market, the relationship between the central government and the local government, and the life cycle of enterprises, this paper makes an essential analysis of the case phenomenon and draws the following conclusion: （1） In China, the government is not opposed to the market. Government support and market mechanism are important forces to promote the realization of national strategy at the micro level. It is also the concrete embodiment of China’s economic development road confidence. （2） Coordinating the relationship between the central government and the local government is an important guarantee for maintaining the unified leadership of the central government, mobilizing the enthusiasm of the local government and the market, and promoting the rational cross-regional distribution of enterprise investment. （3） The innovation effect of the interaction between government support and market mechanism has significant periodicity and hysteresis, and its economic effect is the result of enterprises’ multi-cycle development. Therefore, the realization of the strategic goal of the interaction between the government and the market needs a long-term process.The contribution of this paper is that it breaks through the opposite perspective on the understanding of the relationship between the government and the market, reveals the experience of China’s economic development with the interactive operation mechanism in real cases, and provides a realistic basis for China’s road confidence.