The strategic re-orientation of China’s economic growth is to expand domestic demand. Analyses of the Urban Household Survey data from 2002 to 2009 show that consumption structure significantly vary across different ages: a higher expenditure share on education，recreation，and clothing for the youth，a higher expenditure share on household facilities，articles，and services，transportation，communication，and residence for the middle aged，and a higher expenditure share on medicine and medical services for the elderly. The relation between age and consumption structure is very robust. After comparing the relative importance of age，period，and cohort effects，and controlling for other socio-economic factors，age appears to be the fundamental driver of consumption budget allocation. Based on population forecast from 2015 to 2030，it is found that population aging will have a significant effect on domestic demand and industrial growth. It is imperative to direct industrial growth and make scientific industrial policies in accordance with demographic transition for a stable，sustainable，and healthy economic growth in China.