Abstract: Expanding domestic consumption demand is one of the key measures to change the way of the economic development.The researches show that the urbanization has a positive role in promoting domestic demand.Though the government-led development model of urbanization has a positive role in expanding consumer demand of the residents in China, there are also many negative effects on consumption growth.This paper tries to analyze the negative impact of government-led development model of urbanization on consumer demand, and find out the main factors restricting the expansion of consumer demand in the process of urbanization which caused by the role of the government-led and proposes countermeasures.