Treatment by injection or infusion is widespread in China. Using the common cold as a tracer condition, we explored the reasons for over-prescription of injections and infusions in Guizhou, China. Interviews with prescribers, patients and key informants were supplemented by focus groups. These revealed how historical ideas encourage unnecessary use of percutaneous treatment: faith in the healing power of needles is locally attributed to association with acupuncture. Many patients and some staff believe that injections per se are therapeutic. However, the structure of health service financing and remuneration now reinforces this irrational faith. Market-based reforms have attempted to control costs and increase productivity with an incentive scheme which rewards prescribers financially for over-prescription in general and for use of injections and infusions in particular. Aggressive marketing has displaced oral treatment from health facilities into independent pharmacies, leaving doctors functioning mainly as injection providers. There is a need for a multi-faceted response encompassing education and reform of financial incentives to reduce the use of unnecessary treatment.