As two major parties in urban renewal activities，The government is the defender of the public interest，the market is the pursuer of the private interest，The different interests and roles determine the inevitable conflict and dislocation of the relationship between them. By coordinating the relationship between the government and the market，and by realizing the balance of interests of both sides，The urban renewal policy of Shenzhen city has enlarged its own value，which reflected that the government’s intervention changed from “inactive to modest” in order to solve the market failure. Considering the urban renewal policies of Shenzhen in the scope of rule of law，it should be transformed to legal. On the one hand，the existing policies should be integrated and typified so that it will lay a foundation for the legalization of policies；On the other hand，we must speed up the promulgation of the basic law to guide the two parties to participate in urban renewal activities. Of course，as the government becomes more and more involved，We should beware of the government’s excessive intervention which might restrict the enthusiasm of market’s participation，and regulate the operation of government power through laws.