A scientific analysis of competition should be based on the correct understanding of capital's intrinsic nature in light of Karl Marx's method of distinguishing between production and the circulation field in analyzing capitalist economy. Similarly, competitive neutrality cannot be correctly positioned without a thorough understanding of the essential features of socialist economic system with Chinese characteristics. In this vein, Competitive neutrality cannot be discussed in a very general sense, since the "competition neutrality" with different meanings and scopes of application has completely different impacts on the dominant status of China's public economy. This study views that the competitive neutrality suitable for China's national conditions should be implemented on the premise of adhering to China's basic economic system, so that competitive neutrality can coexist harmoniously with competitive neutrality in China.