OBJECTIVES: Osteoarthritis generally affects the joint functions of elderly patients causing significant pain and burden. There is no cure for osteoarthritis and treatments tend to aim to alleviate pain and slow the progression of the disease.  This study estimates the cost-effectiveness of celecoxib for treatment of osteoarthritis in China.  METHODS: The National Institute for Health and Clinical Excellence (NICE) developed a health economic model that was adapted to update the relative risks of adverse events using data from the CONDOR trial. This study localized the model to treatment patterns and costs in China. Comparators included celecoxib and diclofenac + PPI.  The relative risks for adverse events were taken from the CONDOR trial. The base case patient was 55 years old. Treatment cycles were set to 3 months and the model ran for 180 cycles. Effectiveness was measured in quality-adjusted life years (QALYs). Costs and QALYs were discounted annually at 4.75%.  Costs were reported in 2013 USD (1 USD = 6.07 RMB). RESULTS: For celecoxib vs. diclofenac + PPI, using adverse event relative risks from the CONDOR trial, celecoxib has a cost of $3,707 and 8.805 QALYs while diclofenac + PPI has a cost of $3,757 and 8.813 QALYs. The incremental costs and QALYs of celecoxib vs. diclofenac + PPI are -$49.45 and -0.009 QALYs respectively. The incremental cost-effectiveness ratio for diclofenac + PPI vs. celecoxib is $5,793. Drug costs account for 26% and 28% of the costs in the celecoxib and diclofenac + PPI arms, respectively.  CONCLUSIONS: Celecoxib is a less costly alternative than diclofenac + PPI. The difference in QALYs between celecoxib and diclofenac + PPI is extremely small and through sensitivity analysis may not be significant.