Twilight Years

Not long ago， the White Paper on Development of China’s Undertakings for the Aged was released at the 2016 Summit Forum on China’s Health and Pension Industry jointly held by the Chinese Academy of Social Sciences and China Business. According to the White Paper， by the end of 2015， China was home to about 222 million people over the age of 60， which accounted for 16.1 percent of its entire population. The figure is far past the “red line” of 10 percent， the internationally-recognized maximum desired percentage of retired people.

As predicted， by the 2050s， the elderly in China will exceed 400 million， making one in three Chinese citizens a senior. The influx of the elderly has resulted in a pressing issue for everyone getting old： Where will I go when I need care？

Pension System

China has seen accelerated urbanization since its reform and opening up– from about 20 percent in the 1980s to 56.1 percent in 2015. Massive numbers of young adults have poured into urban areas， leaving their parents with empty nests. Moreover， the country’s birth rate has dropped to 1.4 children per woman since the implementation of the family planning policy over 30 years ago， shrinking the size of families. When the only child’s parents grow old， each couple will have to provide for four parents， leaving a heavy burden on the young adults. “Raising sons to support parents in their old age” is no longer possible， and the establishment of a social pension system has become a general trend.

As outlined in the 13th Five-Year Plan（2016-2020） to address China’s situation， a multi-purposed system providing senior care should be established involving families， supported by community， and supplemented by institutions. Statistics from the White Paper show that in 2014， nursing institutions for the elderly cared for 2.1 percent of people over 65 years old and 8.5 percent of disabled seniors.

Public nursing homes have always been the top choice for the majority of those in need due to consistent quality and reasonable pricing. Reports on how difficult it is to get a bed in a public nursing home have become commonplace. Some news outlets reported， for example， that the wait to get into the most popular nursing home， Beijing First Social Welfare Institution， is about 100 years.

To solve the problem， local governments have designed many policies to normalize public nursing homes and offer policy support to private nursing institutions.

In 2015， Beijing municipal government promulgated administrative measures to register and assess state-run nursing institutions， categorizing four groups of clients for such institutions： seniors in exceptional poverty， those receiving support for food， clothing， medical care， housing and burial expenses， the disabled and elderly from impoverished families and entitled groups， and the disabled and elderly older than 70 from the impoverished families limited by family planning.

Additionally， the municipal government of Beijing has launched pilot projects to foster collaboration between state-run and private nursing homes. Policymakers hope that in the near future， state-run nursing homes will play a secondary role and that most senior citizens will enjoy homebased care， home nursing service， or reside in private nursing institutions.

Booming Industry

As calculated by the White Paper， during the 13th Five-Year Plan period， China will see growth to 35 to 40 beds per 1，000 elderly people， a potential growth rate of between 30 and 50 percent in facilities for the elderly.

“As China enters an era of population aging， organizations for the seniors and the healthcare industry will thrive as key pieces of social development，” commented Zhou Limin， assistant editor-in-chief of China Business. “After the government’s publication and improvement of national policies， the industry is expected to become one of the most lucrative， creative with a diverse range of choices.”

In Europe and America， most investors in nursing institutions are insurance and real estate companies. The same has happened in China. Over the last few years， insurance giants including China Life Insurance， New China Life Insurance， and Taikang Life Insurance， real estate giants such as Vanke， Wanda， and Poly Real Estate， and myriad large state-owned enterprises have invested in establishing nursing institutions in hopes of taking the lead of the emerging sector.

“Today， investors are bullish on nursing institutions because of the promising industry chain behind them rather than immediate profits，” illustrates Xu Biao from China Life Insurance， who has long been committed to investing in care for the elderly. “Investments usually take 15 years to pay off. Such an industry chain spans a wide range of trades， such as food， mobility tools， assisting devices， and tourism designed for the elderly.”

International Experience

Japan tops the planet in aging population. By October 2013， citizens 65 or older had accounted for a fourth of its total population. In 2012， sales of adult diapers overtook those for infants in the country. As defined by the United Nations， a country or region with more than 20 percent of its population above age 65 has entered a stage of “super aging.”

Of the many developed countries， the experiences gained by Japan in dealing with the issue of aging may be the most valuable for China. The latter can learn concepts and technology to take care of the elderly from the former， as well as studying Japan’s policy and social security system.

Industry insiders also point out that there is no way for China to completely follow another country， whether it is Japan， a European country or the United States. It is easier to introduce sophisticated facilities and equipment from abroad， but a long road still remains in upgrading service and overall quality of caregivers.

In the past， most Chinese people looked down on nursing workers， most of whom were outlanders living in big me- tropolises such as Beijing and Shanghai for better opportunities. Caring for the elderly is a common choice for females from rural areas who haven’t completed much education. Measures to provide better training would upgrade service quality and rehabilitate the image of the profession.

Today， China has opened its door wide to welcome foreign investment in the trade， hoping to introduce state-of-the-art service concepts and attract professionals to more obscure localities. So far， companies from many countries including France， Germany， and Australia have launched senior care business in China. By the end of 2015， the biggest Japanese nursing institution， Nichii Gakkan Company， had purchased six Chinese household management companies and announced plans to buy 10 more， in an effort to spread their home nursing services into many Chinese cities.

Foreign investors widely believe that China is in the early stage of providing greater care for the elderly， and that the market has great potential.