This paper summarizes the practices of China’s development finance and develops a demand and supply framework of institutions to explain its inherent theoretic logic：China’s transforming economic institutions，especially property rights institution determine that China’s government takes more economic responsibilities compared with governments of developed countries，leading to business falling between the government and the market，which determines the demand of development finance；China Development Bank exploits the sprawling organization network of China’s government，high savings，and competitions within local governments to conduct certain financial innovations and has become the main supplier of development finance in China. Based on this theoretic logic and lessons from international development finance，this paper further studies the trend and boundaries of China’s development finance and proposes suggestions on related regulatory reforms.