The success of China in its transition has received a great deal of attention from economists. At the same time, public health experts have accumulated evidence on setbacks within the Chinese health sector, particularly in rural areas. This paper puts these two bodies of knowledge together. It explores the links between the two phenomena. The review shows that economic transition, the ‘Chinese way’, creates specific challenges for the rural health sector. It also invites transition experts to pay more attention to health. There is a need for more studies on how health system development is influenced by economic and public finance reforms.