This paper will discuss the relationship between state and market in contemporary China, which is driven by economic reform. It will explore political economics and evaluate the evolution of the relationship between state and market. What role does this play in the advancement of China's economy? The assignment should evaluate China's economic reforms through the reform of state-owned enterprises. Finally, make SINOPEC enterprises as a case study. Does China need to conform to the changes in the political economic theory, or seek other development? Then review the relationship between the state and the market presented in China and question "the state-owned deteriorating while the privately-owned advancing" , or "the state-owned advancing while the privately-owned deteriorating" relationship. Finally, discuss the issue that although China’s economic reform has been developing towards marketization, from the SINOPEC case, we can find that Chinese Communist Party still plays a controlling role in the market to sustain their long-term administration and ruling legitimacy .