The private economy added value ratio of Xichang is 60.08 billion Yuan in 2007, and increases 17.5 percent, accounting for 47.7% percent in local GDP. The cumulative ratio of contribution of economy development reaches 86.22%.Private economy has become an important force for economic growth of Xichang, but there are still some problems in the development of private economy, such as bad investment environment, the shortage of understanding and supporting. This paper puts forward some suggestions about optimizing development environment, the transformation of government functions, strengthening the financial support for promoting the Xichang＇ s economy to develop better and faster.