Abstract: "The socialist market economy essentially is economy under the rule of law". However,when we emphasize the function of the rule of law in the development of market economy,there is still a need to consider the problem of coordinated development of economy and society. The modern market economy under the rule of law should be originally associated with social governance innovation,abandon the tradition of purely pursuing economic results and ignoring the needs of social governance innovation. Since the reform and opening-up,China's market economy development has focused on pursuing the GDP growth,which practice neglected the social governance innovation,begetting a lot of social problems,and blocked the economic development. Now the most important thing is to improve the new requirements of social governance innovation in value concept of justice,efficiency,and order,to survey the current gap between market economy under the rule of law and the requirements of social governance innovation,then to establish the approaches of the market economy under the rule of law,such as extending civil liberty,protecting the rights of citizens,improving the ability of public participation,regulating and constraining the power.