Abstract: The proportion of residents' income in national income distribution, the proportion of service consumption in total consumption, the proportion of modern productive services in GDP, and the level of consumption infrastructure in China all have enormous potential and space for optimization and improvement, and play an important role in expanding consumer demand. At present, the main obstacles to expanding domestic demand, especially consumer demand in China are not only the limitation in income distribution pattern, policy coordination, and institutional innovation, but also the serious mismatch between the upgraded consumption structure and the existing industrial supply structure, stemming from the structural imbalance contradiction of total demand concentrated in the service industry while total supply tilted towards the manufacturing industry. From the perspective of institutional economics, the deep-seated obstacles to expanding domestic demand, especially consumer demand in China, lie in the insufficient institutional supply and high institutional transaction costs caused by lagging institutional innovation. This is the underlying logic of the real obstacles encountered in expanding domestic demand, especially consumer demand. Therefore, adhering to the market-oriented reform and building a unified national market are the fundamental ways and effective measures for China to expand domestic demand, especially consumer demand.
