OBJECTIVES: Due to the rapidly aging population, dementia is becoming a great concern in China. Moreover, dementia is associated with an important economic burden. The objective of this study was to provide an estimation of the economic burden of dementia in China with and without an adequate treatment.   METHODS: A Markov model was developed to simulate transition between a mutually exclusive set of health states associated with dementia. Average annual economic burden was estimated between patients treated from moderate to severe and patients not treated, over a five-year time horizon. The resource categories taken into account in the model were treatment, hospitalisations, nursing-home care, biological analyses, imaging, scales and professional caregiver costs.  Transition probabilities were estimated from clinical trials. The resource utilisation and unit costs were provided by a Delphi panel. According to the China Alzheimer’s project, there are 10 million dementia patients currently in the country and it is estimated that only 21.3% of them take medicine.   RESULTS: Over the five year, each untreated dementia patient cost on average 40,006 RMB per year, and each treated patient cost 36,503 RMB per year. Given current dementia patients of 10 million in China, and a treated probability of 21.3%, the annual total costs resulted in an economic burden of 392.6 billion RMB per year for dementia patients in China. Because of the demographic evolution of the Chinese population, the number of dementia patients is expected to increase. Increasing the proportion of treated patients might be a way to limit the raise of the burden, as the treatment help to reduce the average annual healthcare costs. CONCLUSIONS: Burden of dementia in China is likely to grow since the expanding ageing population. Adequate disease management using available treatment may be an efficient solution to limit costs.