The relationship between income and happiness is not only the focus of academia but also a practical issue that China must pay attention to in order to achieve the goal of improving people's well-being in the context of economic transformation and upgrading. Based on data from the Chinese General Social Survey, this paper explores the dynamic changes of the effect of income on happiness between 2010 and 2017 in the time and space dimensions. The study finds that while per capita income has risen significantly during these eight years, per capita happiness has barely changed, indicating the Easterlin Paradox existing in China during this period. At the individual level, income has a significant positive effect on happiness, but with the passage of time and the increase of income level, this effect shows a weakening trend. The study also finds that subjective economic status and leisure consumption frequency are mediators of the effect of income on happiness, and the mediation effects remain stable in the time dimension. Based on the findings, this paper presents some policy suggestions to enhance people's well-being in China.