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The role of local government is tremendously important for the economic development in such a huge country like China. On the one hand many chinese scholars criticized the disutility and blindness of local governments’ economic act, but on the other hand we can find one of the reasons that china could accomplish such a rapid economic growth from the local governments’ active economic role. Under the circumstances, the problem arises from the fact that the local governments have the idea of ‘Economy First’ rather than ‘Environmental Protection’ and thus the environmental contamination is done with local governments’ connivance in rural areas. In consequence, a hypothesis can be formed based on understanding of the facts mentioned above on this study. The hypothesis is that the result of implementing chinese environmental policy can be different by the level of central government’s financial support, local governments’ act, and the relations between government and enterprises. Because China faces with such problems as a lack of environmental awareness and a short of local governments’ finance and know-how, it is extremely hard to achieve the economic development and the protection of environment at the same time. Therefore, the local governments often violate the central government’s regulation to protect local enterprises, and there often exists the situation that the local environmental protection agency, local governments and local enterprises are badly in collusion. This study will examine what results are brought about by the interaction among policy, policy making environment, and politics. Furthermore, through the field survey on the area called “Huai-He”, the problems caused in the process of implementing environmental policies are analyzed and the better direction for improvements is also illustrated in this study.