Recently, China's macro-economy is leading world yet contradictory its stock market continues to fall, triggering the market to criticize its strengthening of the financial supervision. Anbound's research team believes that China's financial regulation and capital market performance should be seen from system perspective. On the one hand, China needs to strengthen supervision and block financial loopholes, but on the other hand, it should also protect the normal operation of financial markets and investors' interests. In addition, we have proposed to develop self-organizing ability of the "middle layer", which plays the coordinating, conducting and self-discipline roles in between regulations and the market. China has strong "third party organization" ability, yet has much weaker "self-organization" ability. It is only through possessing these two abilities that China can ensure the market to thrive while abiding to the rules.