A synthesis of the extant literature suggests that financial development is of central importance in facilitating economic growth (Patrick, 1966; Goldsmith, 1969; McKinnon, 1973; Shaw, 1973; Pagano, 1993; King and Levine, 1993a; Hellmann, Murdock and Stiglitz, 1995; Struthers, 2010). This thesis focuses on the relationship between banking development, with respect to both financial deepening and financial widening, and economic growth in China, using the banking and economic system as a major case study. The research first intruduces financial widening into China, links financial widening with financial deepening and economic growth in an edogeneous framework in China, and develops an analytical framework that can be used for further research. In total two frameworks, two models and two mechanisms are adopted. The thesis adopts theoretical analysis, descriptive statistical analysis and econometric methodologies, and chooses Pagano (1993) as the basic theoretical model to expand. The results of the descriptive statistical analysis yields data are concordant with the extant literature, confirming that financial deepening and financial widening are significant to economic growth. 1993-2010 quarterly data from China is analysed by employing the econometric techniques, the empirical model and five hypotheses are tested. The Engle-Granger 2-step cointegration test shows that the alternative hypotheses 1 and 3 are upheld, and the Granger causality test indicates that the results uphold the alternative hypotheses 2, 4 and 5. The research recommends that the formulation of effective policies to strengthen interest rate liberalization and financial innovation, thus promoting financial deepening, hence growth. The research also suggests that government could give priority to supporting financial widening in policy, promoting efficiency of capital allocation, thus promoting economic growth.