Public economy and private economy are two big pillars of our country’s economy, which play important roles in the economic development of China from different sides. Both are needed, but they also have different and even contradictory aspects. Optimizing the relationship between public economy and private economy is of great significance on promoting the economic transformation and developing current economy. This paper firstly analyzes the concepts of public economy and private economy, the relationship between them, and then analyzes the existing problems and reasons for those problems between them, finally give advises on how to optimize the relationship between public economy and private economy.