Abstract: Government adopts policy of streamline administration and institute decentralization in order to stimulate market vitality. Non-cooperative and cooperative relationships between upstream enterprise and downstream enterprise were considered based on the background, studies game relationships between them, and the impact on enterprise's decision and performance by government's policy of streamline administration and institute decentralization. The results showed that government implements policy of streamline administration and institute decentralization to enterprises, which may enlarge market demand, improve enterprise's profit. If enterprises carry out cooperation, which is not only improve market demand, decrease the variation ratio of retail price and trade price, but also bring more benefit to enterprises. So, in order to improve supply chain's performance, enhance market consumption, government should increase the level of streamline administration and institute decentralization, enterprise should carry out cooperation in supply chain.