This chapter discusses the development and innovation of the financial system and explores the relationship between the development of financial sector and China’s economic growth by using the western economic theory，especially the latest legal financial theory，and analysing the institutional changes of the financial system in the past 60 years. The improvement of the legal system can provide an institutional guarantee for the developing countries，just like China，maintain the stability of micro-economic operation through the legal protection mechanism for creditors and investors，and thereby contribute to macro-economic growth and financial stability. It is the enhancement of investors’ protection that promotes the development of the economy of China，and makes China a rare bright spot in the darkness of global financial crisis.