Abstract:This paper first discusses the basic connotation of ethic generation of private SMEs in China,and then points out that ethic generation is very important not only for the existence and development of enterprises but also for social harmony and progress.Ethic generation is not only the growth of enterprise ethical knowledge but also the foundation to improve enterprise ethical boundary and ethical practical ability.However,there are serious defects in private SMEs of China mainly reflected from the shortage of moral cognition and moral generation action.Therefore,it is quite essential to actively respond and adopt the“cycle of threestep method” including establishment of enterprise ethic creed,education of enterprise morality and implementation of enterprise moral principles so as to promote the effective generation of ethics in private SMEs of China.