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China's economy is currently at a crossroad leading to two different directions.One is to further deepen the reform,concentrate on crucial aspects and relax control over details,govern by non-intervention and let the market play an increasing role and lead the economy; while the other is to enhance the state sector with weakening the private sector,and let the government play a greater role and lead the economy.Which direction should China head for? The answer would undoubtedly be the former.As such,this paper argues that there does not exist the so-called “China Model” and attributes the deep-seated problems caused by those misconceptions in China's economy to three pairs of “over-emphasis” versus “under-emphasis”,namely,over-emphasis on the government versus under-emphasis on the market,over-emphasis on enriching state versus under-emphasis on enriching the people,and over-emphasis on development versus under-emphasis on public service.Moreover,in regard to how to solve these problems,the paper proposes to further advance the two fundamental transformations of government functions:(1) to transform from a development-oriented government to a service-oriented government,and (2) to transform from an omnipotent government to a limited government.