Abstract: Encouraging non-public economy to participate in construction of our national defense industry is a key to the national defense reform, but the relevant operation mechanism is not perfect. Through a comparative analysis of the systems of America and Japan, there are four defects of system design on private enterprises to participate in the national defense industry in China, including admittance system, exit system, use of privately owned intellectual property rights, conservation of the state-owned national defense science and technology achievements. To solve the problems, government must change notion, adopt flexible command, perfect statutory regulations, and respect and safeguard the interests of private enterprises, and at the same time strengthen protection of state-owned scientific and technological achievements by intellectual property rights. It also has to coordinate interests among private enterprises, state-owned enterprises and the government, and complete institutional defects as soon as possible, then China is able to establish perfect and effective operation mechanism of private enterprise participating in national defense industry.