In this paper, a calculation method for the different scale and degree of cross subsidy is put forward based on the price-gap method. For different regions, the impact of removing cross subsidy on local socio-economic is analyzed quantitatively by using the CGE model. The research results show that: Compared with Henan and Qinghai where the economy is relatively backward, the degree of cross subsidy on residential and agricultural users is higher in economically developed Jiangsu; The removal of cross subsidy has a positive impact on the output of most industries in different regions. However, the removal of cross subsidy has further enlarged the economic gap between the central-western inland regions and the eastern coastal regions, and the problem of unbalanced regional development will become more prominent.