Government’s Roles in a Market Economy

When it comes to the government's intervention in the economy, we may easily reflect by those socialistic countries with planned economy, where the government plays the main role in the operation of economy, conducting various things ranging from the direction of country's development, to the distribution of 3 meals in its citizen's life. Today, market economy has been closely linked to government, and without government's regulation, the biggest capitalistic entity, the United States, couldn't have been so flourishing.
If the pure capitalism ever existed, it has long since disappeared, as governments in the USA and many other developed countries have intervened in their economies to limit concentration of power and address many of the social problems associated with unchecked private commercial interests. State and government are not ends, but means, whose aim is making the market economy healthier and more balanced. Basically, their effect can cover at least 4 areas.
The first and foremost is stabilization and growth. Government use the model of taxation to affect the condition of consumption, which is the most important monetary policy. The following one is regulation and control, which mainly aims at individual's behaviour, including limitation of monopoly and laws of environmental protection. The last two areas are direct services and assistance. Government produce many goods and services, such as education and public parks, and also own some companies like subways.
In terms of China's market economy, the problems with the Chinese have plagued America and other foreign countries. So far, some countries still don't recognize China "market economy" system, although China's market has been far-reaching. It's believed that with the development of Chinese government and market economy, we can find a proper development road and form a well-established socialist market economy.