Environmental protection and natural resource utilization are crucial for Chinese social and economic sustainable development. The government has issued a series of policies, laws, regulations and standards, and has harnessed some key areas. However, the source of environmental pollution and loss of environmental resources is not eliminated, which will directly affect intra-generational equity and intergenerational equity. Therefore, the paper starts with economics and administration, looks for the source of market failure and government failure, and discusses the balance between market and government in environmental protection and natural resource utilization, as well as the interaction mechanism between market operation and administration.