This study measured current and projected future socioeconomic costs (healthcare, formal care, and informal care costs) and quality adjusted life years (QALYs) lost to dementia in China, and assesses drivers of these costs. We synthesized health and demographic trends by a Markov model, using data from China Health and Retirement Longitudinal Study and Chinese Longitudinal Healthy Longevity Survey. We decomposed socioeconomic costs changes (2018 US$) into population growth, population ageing, dementia prevalence and average socioeconomic costs per case. Socioeconomic costs and the value of QALYs lost to dementia will reach $1,233 and $702 billion by 2050, rising by 563% and 457% over 2020-2050. Informal care is currently, and projected to remain, the largest share of socioeconomic costs. Population ageing (43%) and rising dementia prevalence (54%) drive this growth through 2050. Dementia will become an increasingly large economic burden on Chinese society.