This paper analyzes the overall income and consumption in urban and rural China in 2016. In 2016，income level continues to increase steadily across both urban and rural residents. Meanwhile，the gap of income inequality has been narrowed，and residents’ consumption demonstrates an upward trend with the stabilization of the consumption structure. However，admittedly，there are many factors which have negative effect and become obstacles to boost both income increase and domestic consumption. For example，the decrease of economic development rate，the increase of pressure of income increment，and the structural problem of income distribution，affect the transformation of residents’ consumption structure. Furthermore，the lack of sufficient social security and the soft environment of domestic consumption pose negative effect on current residents’ consumption and consumers’ willingness and confidence. Moreover，insufficient public goods investment reduces residents’ consumption tendency and expectation. For the next year，the economic growth rate will remain at about 6.5%，and both residents’ income and consumption will remain stable increase.