By using the provincial panel data of China from 1985 to 2008, this paper tests the relationship among fiscal expenditure, bank credit and per capita income and adds the crossterm of fiscal expenditure and bank credit to examine the effect of exogenous financial system led by government on economy. The empirical conclusions indicate that the fiscal expenditure in east and middle part of China effectively boosts economic growth while the effect of fiscal expenditure in east part of China is higher than that of middle area, however, the fiscal expenditure in west part of China hampers economic growth, that bank credit in east part of China produces significantly positive effect on economic growth but bank credit capital in middle and west part of China has unremarkable effect on economic growth and that the exogenous financial system led by governments effectively promotes the economic growth of China but its effect in middle and west part of China is not significant.