The paper analyzes the overall income and consumption conditions in urban and rural China in 2010，and forecasts the trend of residents’ consumption in 2011. In 2010，income level continues to rise steadily among both urban and rural residents，where the income growth rate of rural residents outpaces the rate of their urban counterparts. Meanwhile，residents’ living standard further improved，where quality of life has been enhanced to a new level. At the same time，the consumption structure is optimized，and the progress of building a moderately prosperous society in all respects makes further achievement. However，admittedly，the rate of consumer’s consumption—i.e.，the percentage of consumer consumption in overall GDP—is decreasing. And the gap among residents in terms of consumer consumption is widening. Further，the fast increase of housing price and inadequate public service also need to be addressed. According to the current trends，in 2011，the income level for both urban and rural residents will continue to keep a fast rate of increase，and consumption structure will further optimize.