The paper analyzes the overall income and consumption in urban and rural China in 2011, and forecasts the trend of residents' consumption in the future. In 2011, income level continues to increase steadily across both urban and rural residents. Meanwhile, residents' living standard is further improved; the consumption structure is optimized, where quality of life has been enhanced to a new level. However, admittedly, the percentage of residents' income is relatively lower within the overall GDP composition, and the preference of saving becomes an obstacle to boost domestic consumption. Furthermore, the unbalanced expenditure structure is holding back the increase of consumption, which is coupled with the problem of deficiency of public service. For 2012, the economic growth rate will fall back to 8.5%, but the consumption level will keep the trend of steady increase. <<