Based on the panel data of China's 31 provinces from 1997-2013, this paper incorporates various static and dynamic panel data models to investigate the relationship between ageing, health expenditure and economic growth. The results show that both government and household health expenditure have significant positive effect on economic growth, and this positive effect is strengthened by the increasing ageing. The enhanced effect of ageing on the positive economic effect of health expenditure is very robust. Further group estimation and robustness tests show that the positive economic effect of government (household) health expenditure increases with time, and decreases from east to central and to west China. The expansion of health expenditure is of crucial importance to actively coping with population ageing and to realizing the sustained and stable economic growth.