This chapter firstly reviews the main progresses of China’s reform of her financial system in the past more than two years from eight aspects：interest rate liberalization，reform of exchange rate system of RMB，reform of capital account，innovations of monetary policy tools，the credit policy of PBoC，the reform and opening of financial institutions（including the foundation of deposit insurance），the reform of financial markets institutions and the development of insurance industry. After figure out the problems of financial reform policies and challenges of economic management confronted with China in the following years，we offer our suggestions for the next steps：（1）accomplishment of interest rate liberalization，（2）development of immediate financial markets（such as stock markets and bond market）and diverse financial forms（such as internet finance，NGO microfinance institutions，etc，al），（3）reform of macroeconomic management framework，（4）unifies monetary policy，macro-prudential system and micro-prudential regulations，（5）reform the system of financial regulation and supervision to accommodate various financial innovations and to punish illegal behavior. <<