Health financing includes the process of the collection, distribution and utilization of health funds, concerned with issues including source channel and amount of the source, the flow and amount of the allocation as well as the efficiency and equity of the use, which has substantial influence on the availability and affordability of health services. The development of the Chinese health financing system has made progress in certain aspects since 2009 when the new phase of Chinese health system reform was initiated. The total volume of health financing has been increasing yearly; the structure of health financing has been optimized; financing pattern has been clarified; the financial security level has been improved; input mechanism has been refined; the function of financing institutions has been adjusted accordingly. However, there remain some challenges, mainly including lack of top-down design of health financing, high residents’ out-of-pocket expenses, inadequate equity, lack of accompanying design fit for the need and demand of the poorest and the richest. Therefore, suggestions for optimizing the construction of health financing system in China has been provided in this article.