Abstract: The cotton industry is the main component of the agricultural income of rural residents and the national economy in Xinjiang. In this study, we analyzed the impact of cotton industry to the national economy in Xinjiang by quantitative analysis. The results showed that further improvement of cultivation area and yield per unit would generate adverse effect on national economy under high level of cotton planting area and yields in Xinjiang. Integrate the problems such as increase of planting costs, single structure of agriculture and decline of cotton quality, we proposed to rationally plan the layout of the cotton industry, implement the standardization strategy, building cotton risk security system and the protection of the interests of farmers.