The transformations of government functions and development mode are two core tasks in the process of improving the socialist market economic system in China. In order to handle the relationship between government and the market, to achieve the goal of improving the socialist market economic system, we must accelerate the transformation of government functions. Over the past decade, the transformation of the functions of our government has made some achievements, but there are still lacks of scientific ideas, cooperative development and driving force. The transformation of development mode should be the title meanings to improve the socialist market economic system. China's development mode transformation has achieved some targets, which are mainly reflected in the scientific development concept gained in some areas,provinces and cities. Though development and transformation achieved remarkable success, but there are still problems hard to solve and a linkage mechanism need to establish. Only to speed up the transformation of government functions as the core and to further improve the socialist market economic system, can the mode of development achieve a smooth transition. To promote the transformation of government functions completely, we should obey the three rules. First, we must open our minds and establish the scientific concept of political. Second, we must strengthen restrictions imposed on the authority. Third, we must build a civil society and foster the culture of power. <<