To expand China's domestic demand, the focus is on increasing household consumption and labor income, as well as promoting urbanization and service industries. Different strategies will have varying effects on domestic demand expansion. It is suggested to limit labor income reductions in western regions, raise wages without cutting jobs, ease the burden of social security insurance on firms, allocate some profits from state-owned enterprises to social security, and reform government public sectors. Japan's experience shows that expanding domestic demand takes time, so goals and strategies can be adjusted as needed.