Abstract: The reason for the failure of trade associations in China during the transitional period was the conflict between public welfare and private welfare.Government and mass people had over-sought public welfare in a political sense,neglecting the proper private pursuit of trade associations as the products of market economy.Whether the associations are public or private is decided by the three factors of private operation,market,and nonprofit operation,and they should not be imposed with a good or bad sense.Therefore,the reform of trade association system,puffing that public welfare is prior to private welfare,now is going on the wrong way.

Key words: trade associations, failure, public welfare, private welfare, marketization, nonprofit operation, private operation