OBJECTIVES:  As of 2015, 114 million people have diabetes in China. However, only 38.6% of people with diabetes are aware that they have diabetes; merely 25.8% of people with diabetes are taking diabetes medicaitons. Insufficient treatment and delayed insulin initiation are key challenges for diabetes management in China. This study is to evaluate the long-term impact on health outcomes and medical costs of early treatment among people with type 2 diabetes (T2DM) in China. METHODS:  This study compares the health outcomes and medical costs between early treatment (defined as patient receiving diabetes treatment at baseline HbA1c 7.5%) versus current practice (treatment at baseline HbA1c 9.0%) over 30-year time horizon based on CORE Diabetes Model. The baseline individual characteristics, risk factors, treatmet effect and meidcal costs are extracted from large scale studies in China. Costs and health outcomes are discounted at 3% annually. RESULTS:  Health outcomes: early treatment is associated with less cumulative incidences of diabetes-related complications – myocardial infarction (MI), neuropathy, foot ulcer, retinopathy, congestive heart failure (CHF) reduces by 3.75%, 3.17%, 2.11%, 1.92%, 0.30%, respectively; increased expected life years by 0.371 (15.208 vs 14.837), and quality adusted life years by 0.260 QALYs (10.855 vs 10.595). Medical costs: early treatment saves total direct medical costs, anti-diabetic medication cost, and complication cost by CNY 6,533 (201,774 vs 208,307), CNY 493 (54,911 vs 55,404), and CNY 6,986 (101,098 vs 108,084), respectively per patient. Sensative analysis demonstrated the robustness of the study results. CONCLUSIONS:  Diabetes early treatment is associated with long-term improvements in health outcomes and savings in medical costs for people with T2DM in China. The new evidence suggests that early intervention is a cost-saving strategy in diabetes management in China, which will contribute in achiveing the golas set in Healthy China 2030.