OBJECTIVES: Recent estimates from the Diabetes-Atlas have quantified the total annual expenditures of diabetes in China between Ұ354 to Ұ611 Billion-Chinese-Yuan (BN-CNY) (2015). The objective of our study was to employ a modeling approach to re-estimate the annual cost burden based on the current standard of type-2-diabetes (T2D) management (status quo (SQ)) in China and a series of hypothetical improved management strategies. METHODS: The QuintilesIMS-CORE-Diabetes-Model (CDM) was used to evaluate the economic burden of T2D in China based on assumptions reflecting the current SQ of T2D-management and a number of step-wise-improvements. SQ was defined as a scenario in which T2D diagnosis is delayed by 4-years, treatment escalation to maintain glucose control occurs at a 9%-HbA1c-threshold, and an overall 60% adherence rate (AR). Step-wise-improvements considered immediate diagnosis, declining levels of HbA1c-escalation-thresholds to 8.0% and 7.0% and improvements in AR to 80% and 100%. The CDM was applied on per-capita level to project lifetime costs and clinical outcomes of newly diseased T2D individuals in the Chinese setting. Model outcomes were subsequently annualized and extrapolated to Chinese-national-level considering the total number of diagnosed T2D individuals in China. RESULTS: The total annual direct cost attributable to diagnosed T2D in China reflecting current SQ-management was estimated at 611 BN-CNY. Scenarios exploring step-wise-improvements from SQ estimated annual net-savings of Ұ32, Ұ33, Ұ57, Ұ69 and Ұ73 BN-CNY for scenarios exploring immediate diagnosis, threshold reductions to 8.0% and 7.0% and AR increased to 80% and 100%, respectively. Net-savings resulted from reduced costs to treat diabetes complications (Ұ36, Ұ63, Ұ117, Ұ134 and Ұ154 BN-CNY) and excess treatment costs alongside step-wise-improvements (Ұ3, Ұ30, Ұ61, Ұ66 and Ұ81 BN-CNY). Per-capita life-expectancy was increased by 0.26, 0.69, 1.30, 1.48 and 1.68 years, respectively. CONCLUSIONS: Improved T2D-management-strategies can help to decrease the financial burden of the disease and increase life-expectancy of T2D individuals.