Although stakeholders in China have begun promoting medical and public health data sharing, a large portion of data cannot flow freely across research teams and borders and be converted into “big data.” To identify the ethical challenges that are considered to hinder medical and public health data sharing, we performed a systematic literature review pertaining to medical and health data sharing in China. A total of 2959 unique records were retrieved through the database search, 61 of which were included in the final synthesis after full-text screening. This review provides an overview of the current ethical challenges and barriers involved in data sharing for healthcare purposes in China. Through the systematic review of evidence from peer-reviewed literature and dissertations, we identified barriers and ethical challenges grouped in a taxonomy of capacity building needs, balancing different stakeholders’ interests, scientific and social value, and the data subjects’ rights, public trust and engagement. Best practices and educational implications were suggested based on our findings.