During XiBai Po Period,on the basis of right analysis and cognition of Chinese situation,the C.P.C. and Comrade Mao ZeDong confirmed the necessity of the existence and development of private capitalism and formulated policies of developing foreign trade by making use of foreign capital. Protection of national industry and business was made one of the three economic principles. Policies to limit and utilize private copitalism were proposed.This practice was the improvement and expansion of C.P.C's new democracy economic theories and laid a theoretical foundation for China's transmission from new dcmocracy fo socialism Meanwhile,this practice shed new light on the essential features of socialism,so that we may have a better understanding of the relationship between socialism and capitalist economy and the way speed the pace of socialist modernization.