Abstract: During the early days of new China, based on the situation of low overall productivity level and unbalanced development, the CPC central committee has chosen to implement planned economy system, which started from the development of heavy industry, thus, expediting the historical process of China’s industrial entry-level stage, consolidating the new socialist regime, and safeguarding the security of the nation. Nevertheless, according to the development of productivity, major changes have occurred in China’s social and economical structures. Especially after reform and opening-up, the emergence of multivariate economy, the prosperous commodity economy and the individual formation of global market mechanism also have created conditions for us to establish the market economic system. The CPC central committee and the State Council thus have made the second choice of the economic system, and set the goal of establishing the socialist market economy system and realizing the historical change from planned economy to market economy. Although the subjective factors inevitably affect the choice of the two economy system, China’s national condition and the worldwide economy integration trend, finally, determine all