Before the 1959 Democratic Reform, Xigaze had no modern industry. The traditional handicraft industry was at the brink of bankruptcy, being shackled under the feudal serf system, and craftsmen were regarded as mean and humble. The Democratic Reform started modern industrialization in Xigaze, which has made great progress since the adoption of reform and opening-up policies. Xigaze now boasts well-developed industries such as hydropower, chemical, machinery, building material, forestry, automobile repair, food, stationery and mineral water. Traditional folk industries, such as gold and silver processing, fir and leather products, kardian cushions and tourist souvenirs, have developed. The handicrafts are not only loved by local people but enjoy a great reputation in the world. The hydropower industry, represented by the Tanghe Power Plant, has ended the use of oil lamps. Presently, 738 enterprises employ 11,300 workers. The overall industrial and agricultural output was 1,000 times that of 1959, 29.3 times that of 1965. According to 1996 statistics, electric energy production in Xigaze reached 50.1059 million kw/h, and log output was 5,495.23 cubic meters, lumber production was 3,648.04 cubic meters, wheat flour production was 3,318.9 tons, and kardian cushion production reached 7,323.38 square meters. All combined, the overall industrial output was valued at 650 million yuan.

Before the Peaceful Liberation of Tibet in 1951, people in Xigaze traveled mostly on foot and animals were used for longer trips. No roads existed in the real sense only byways on slopes. People crossed rivers by sliding on iron chains. In 1954, the Nyang Qu River flooded. While fighting this natural disaster, the state allocated special funds to build three highways from Xigaze to Gyangze, Gyangze to Yadong and from Gyangze to Tibet. Victims of the disaster could take part in the projects and be paid. More highways were built later, such as China-Nepal Highway and Lhaze-Burang Highway. Road conditions are improving. In the early 1990s, a new highway connecting Quxoi and Xigaze was built. State, provincial and county highways have now formed a network running 8,000 kilometers, twice that of 1975. The China-Nepal Highway runs across the Xigaze area, and Xigaze-Gyangze, Lhaze-Burang and other highways extend to every township. In Xigaze, 5,000 vehicles are in use, which boast a transportation capacity of 128,500 tons of goods and 100,000 passengers yearly.

Through inequitable treaties, Great Britain had once set up business agencies and post offices in Gyangze and Yadong. After the Peaceful Liberation of Tibet, these treaties were abolished and a new postal network was set up. By 1959, 12 post offices and agencies had been set up, and the postal line extended 179 kilometers. After dozens of years' efforts, especially during the 1990s, postal service had improved drastically. In 1994, the postal route in the urban area reached 2,745 kilometers and 9,178 kilometers in rural area. There were 23 telegraph lines and 98 long-distance telephone lines. Switchboard installations for program-controlled telephone systems within urban limits totaled 5,568 sets. The post offices and agencies had dealt with 57,432 express mails and attracted postal savings of up to 5.3 million yuan, and business turnover reached 3.5021 million yuan. In 1996, the turnover rose to 7.4535 million yuan. The year 1988 had witnessed the first operation of optical cable communication, which greatly updated the postal service. Telephone lines have reached most counties and townships. Program-controlled telephone sets, mobile phones and paging services have shortened the distance between Xigaze and the outside word.