Abstract: The arid regions occupy a vast area in north-western China including the Alxa Plateau in the western part of Inner Mongolia the northern part of Ningxia Hui Autonomous Region most of Qinhai and Gansu provinces and Xinjiang Uygur Autonomous Region. Assessing urban ecological economic system can provide the basis for urban decision making towards sustainable development This paper takes capital cities in arid regions of western China as cases and assessed the state of urban ecological economic systems Based on the principle of the ecological economy unit the paper proposed a methodology for assessing urban ecological economy system. It includes a computation model for urban ecologic-economic niches criteria of selecting indicators for eco-economy system assessment and 30 detailed indicators The basic and most important criterion is to describe the urban ecologic-economic system as originally as possible with a few indicators Under the guidance of the criteria this paper categorized the indicators into three groups of ecological economic and environmental and then chosed 30 detailed indicators including 11 ecological 11 economic and 8 environmental indicators After treating the baseline data with dimension reduction method, the paper calculated the urban ecologic-economic niche of the capital cities in arid regions of western China in 2002 and 2003. The results show that in 2002 and 2003 in arid region of western China the urban ecologic-economic niche of Unumqi won the first place and X ing fell behind other cities in both 2002 and 2003. The fact Unumqi kept ahead can be related to the lower population density good infrastructure and cozy living conditions compared to other studied cities; while X ing fell behind other cities has a close relationship with highest population density low-level education and unfavorable environment settings

Key words: arid regions of Western China, niche, urban eco-economic niche