By extending the dual monetary market structure of Keynesians speculative monetary demand theory, China’s ISLM Model is restructured, the assumption which the slope of both IS curve and LM curve is negative is arrived at. Based on statistical data from 1990—2008, the China’s ISLM curve is quantitatively tested, the results support the assumption of negative slope of China’s LM curve. The reason for that China’s LM curve is inclined to left upward side is that domestic monetary supply quantity is mainly controlled by adjusting savings preparation requirement ratio or direct adjustment of interest rate but not by the approach of treasury bond market, that the financial market is not simple dual market structure of money and bonds but includes stock market, real estate and so on, and that interest rate is adjusted by marketization. The research shows that China’s financial policy can increase more output level than monetary policy, China should accelerate bound market development, perfect instrument system of central government’s adjusting monetary supply, maintain the stability of money, restrict speculation of stock market and real estate market and continue to boost the reform of interest rate marketization and stateowned enterprises.