Typical health/wealth models allow for health investments that may partly ab sorb health shocks during the lifecycle.Taking into account that both market pro ductivity and health-investment productivity depend on health stocks, there is a double-sided causality, from health to wealth and vice versa.Models that try to fit panel health/wealth data have a difficulty in establishing the causality direction.In order identify this causality direction we investigate the long term effects of the 2nd Sino-Japan war (WWII) and the later civil war (1937-1950) on health and wealth outcomes of 45+ elder individuals in China.We combine a unique armed conflicts data set collected from historical documents with individual survey data from the China Health and Retirement Longitudinal Study (2011 National Survey).We find that exposure to the battle shock significantly reduces later adult health outcome such as lung function.Moreover, the later wealth accumulation is also affected neg atively.According to our conservative estimates, exposure to battle shock would reduce the lung capability by around 5% compared with the population mean and the wealth level by around 21% compared with non-shocked groups.We investigate which health-model ingredients can replicate the lifecycle health/wealth dynamics of such permanent health shocks.