Based on Mr.Lin' s analysis on the strategies of developing heavy industry first and tradi tional economic system,the paper discusses the stra tegy of China' s stock market development for the re form of the state owned enterprises and the problems relate d to its institutional arrangement p erformance.The paper compares the t wo strategies from seven aspects.From the point of cause and compulsory institutional change,the paper analyzes the reason for low efficiency of institu tional arrangement in stock market,and puts forward some policy recomme nda-tions.