Finance of Governmental Credit（FGC）is a term used under the socialist market economy system with Chinese characteristics. It mainly refers to the investment and financing of local government and other government-related entities in order to provide public goods，as well as the financial support and financial services provided by the financial sector for these investment and financing activities. Firstly，we clarify the connotation and extension，the scope and the dimension of FGC in the context of China. Secondly，summarizing the development practice of FGC in China in the past 40 years of reform and opening up，analyzing the development momentum of FGC，and discussing the background of financial development，reviewing the development of FGC. Thirdly，we argue that economic development and urbanization have led to a rapid increase in the people’s demand of the public goods，and put forward higher requirements for the government’s supply. This is the biggest historical background for the development of China’s FGC. Fourthly，we point that there are some constraints on the development of FGC，due to the unique fiscal relationship between the central and local governments in China，and leading to some problems. Therefore，at the end of this report，based on the problems existing in the development of FGC，the corresponding countermeasures and suggestions are put forward. It is pointed out that not only the financial system but also the fiscal system must be reformed to promote the healthier development of FGC.