By using cointegration test and ECM model, based on the annual data of financial assets of household department flow amount published by the PBOC since 1992, the wealth effect of all kinds of financial assets held by Chinese households is analyzed, and the results show that the disposable income is the main factor affecting Chinese residents consumption, that the wealth effect of cash, bank deposit and stock held by the residents is not significant and that bonds and insurance assets have negative wealth effect and squeezing-out effect on the residents’ consumption, thus, while stable growth of the residents income is boosted, China must further develop and perfect China’s financial market, enlarge market scale, raise market efficiency, stabilize investors forecast and perfect the system for housing, medicare, education, endowment insurance and so on as soon as possible so that the financial assets can sufficiently guide and regulate Chinese residents consumption.