Abstract: In 2016, the discussion about the availability of the industrial policy between Lin Yifu and Zhang Weiying has become the focus of the economic research. The former praised the industrial policy highly and advocated the government to support the industries with potential comparative advantage to encourage the innovative activity and accelerate the development of the infant industries; the latter held opposite opinions to the industrial policy with the angle of the economic paradigm, the unpredictability of the innovation and the agency mechanism of the officials. By reviewing the opinions of this discussion, and combining the history of the modern economy, this paper puts forward introducing the competitive industrial policy and compromising the market mechanism and the governmental functions to make concessions to their opinion. At last, it extracted the ideological implication of the socialist market economy with Chinese characters.

Key words: market mechanism, industrial policy, market failure, competitive industrial policy