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Introduction: The burden of type 2 diabetes (T2DM) in China is increasing, with potential impacts on the health‐related quality of life (HRQoL) of those who develop the disease. Context‐specific assessment of HRQoL and its associated factors informs the development of contextually appropriate interventions to improve HRQoL. This study aimed to determine the HRQoL and its associated factors in people with T2DM at a tertiary care clinic in Ningbo, China. Methods: A cross‐sectional survey was undertaken among 406 people with T2DM in 2020–21. The primary outcome was HRQoL measured using EQ VAS and EQ‐5D index from the EQ‐5D‐3L questionnaire. Multivariable regression analysis was used to determine the factors associated with HRQoL scores. Results: The mean (± standard deviation) EQ VAS score was 68.7 (13.8). Median (interquartile range) EQ‐5D index was 1 (0.027). Prevalence of problems in HRQoL domains was as follows: pain/discomfort (15.7%), anxiety/depression (13.3%), mobility (5.4%), self‐care (3.5%) and managing usual activities (5.2%). The ≥60 years age group had a mean EQ VAS score 8.7 points higher (95% CI 3.4, 13.9; p <.001) than the 18–39 years age group. Those with T2DM >10 years had a mean EQ VAS score 8.6 points lower than those with a duration <1 year (−12.8, −4.4; p =.001). A T2DM duration >10 years was associated with a reduction in the EQ‐5D index of 0.029 (−0.041, −0.016; p <.001) compared with a duration <1 year. Conclusions: Depression/anxiety and pain/discomfort are important domains of reduced HRQoL for this population. A longer duration of T2DM is associated with reduced HRQoL scores, including both EQ VAS and EQ‐5D index. Increasing age may be counterintuitively associated with an increase in EQ VAS score in this population, potentially reflecting a 'paradox of aging' process. Future work should focus on developing, evaluating and implementing interventions to improve HRQoL in T2DM, such as strategies to manage pain and mental health conditions. [ABSTRACT FROM AUTHOR]