Abstract: In recent years, as the discussion of the topic of “the state advances while the private sector retreats” becomes more intense, some issues which should be alert to and reflected on are gradually exposed. The proposition of “the state advances while the private sector retreats” makes the state-owned enterprises and the private enterprises become the opposite sides, the success of one side would result in the failure of the other; however, the relationship between these two sides is not only a fighting relationship that cannot coexist for common prosperity. Both state-owned enterprises and private enterprises have many common interests, their developments have to be realized through their own reforms and on the basis of being aware of their relationship and the relationship between them and the bureaucrat-capital and foreign monopoly capital, so as to jointly promote the development of China’s economy through their mutual assistance and cooperation in the orderly competition.

Key words: “the state advances while the private sector retreats”; state-owned enterprises; private sector