The China’ economy has been structurally deleveraging recent years. By constructing a dynamic stochastic general equilibrium model with state-owned enterprises and private enterprises, this article explores the impacts of different types of firms deleveraging on China’s macroeconomic fluctuation and its welfare effects. We find that, compared with state-owned enterprises, the deleveraging (or leveraging) of the privates has a greater impacts on economic fluctuations. More importantly, if the private enterprises increase the leverage rate, it may aggravate macroeconomic volatility by the leverage effect and reduce the level of consumption risk sharing. We also find that the increasing of leverage by the privates may bring about much great degree of potential welfare improvement, which is mainly due to the elimination of fluctuations on both consumption and employment.