Coun­try to open mar­ket for el­derly care

China Daily (Hong Kong) - - CHINA - By CHEN MENGWEI and WANG YANFEI

Busi­nesses that serve the needs of the el­derly in China are in the spot­light again as the cen­tral govern­ment an­nounced on Fri­day that it will “fully open up” the mar­ket by 2020 and in­vite more for­eign in­vestors into the non­profit ser­vice sec­tor.

Calling el­derly care a “sun­rise in­dus­try”, the State Coun­cil’s Gen­eral Of­fice in a 6,000word cir­cu­lar laid out plans to im­prove ser­vices for China’s fast-ex­pand­ing group of el­derly cit­i­zens. They in­clude low­er­ing the en­try thresh­old by sim­pli­fy­ing reg­is­tra­tion pro­ce­dures for all el­derly care in­sti­tu­tions, build­ing a mar­ket pric­ing mech­a­nism and a credit sys­tem for the sec­tor and us­ing in­ter­net tools to put ser­vices near at hand.

Since 2013, China has of­fi­cially opened its arms to over­seas in­vestors to cre­ate for­profit el­der­care busi­nesses. This time, the cen­tral govern­ment is of­fer­ing to lift re­stric- tions for them to take part in the non­profit sec­tor, promis­ing rights and ben­e­fits equal to those of their Chi­nese coun­ter­parts.

The de­tailed pol­icy for for­eign and do­mes­tic in­vestors has been sub­mit­ted to the State Coun­cil’s Leg­isla­tive Af­fairs Of­fice for fur­ther re­view and ap­proval, ac­cord­ing to the Min­istry of Civil Af­fairs. The pol­icy is ex­pected to be fin­ished by the end of the year, as di­rected.

At present, non­profit providers of care for the el­derly in China can get var­i­ous govern­ment sub­si­dies.

For in­stance, in He­bei prov­ince, the govern­ment will of­fer 4,000 yuan for each bed and 100 yuan ($14.4) for each cus­tomer the provider takes in, in ad­di­tion to lower land costs and taxes, ac­cord­ing to Li Donghui, mar­ket­ing di­rec­tor of Yanda Golden Age Health Nurs­ing Cen­ter in Yan­jiao, He­bei, a non­profit el­der­care com­mu­nity that cur­rently has 2,300 beds and plans to add an­other 7,700 by 2018. Pop­u­la­tion aged 60 or above in China

In Bei­jing, the sub­sidy can be up to 10 times higher.

Li said he spoke with some of his over­seas coun­ter­parts at a con­fer­ence in France last month, and they asked many ques­tions about China’s el­der­care mar­ket.

Gain­ing mar­ket share by en­ter­ing the non­profit sec­tor and sell­ing rel­e­vant prod­ucts to se­niors can be prof­itable, he said.

Bai Ming, a re­searcher at the Chi­nese Academy of In­terna- tional Trade and Eco­nomic Co­op­er­a­tion, the think tank of the Min­istry of Com­merce, said the Chi­nese govern­ment has re­cently shown in­ter­est in invit­ing for­eign in­vestors to in­ject money into cer­tain lag­ging in­dus­tries, in­clud­ing care for the el­derly.

“We need to wait and see if solid mea­sures will be taken to en­cour­age for­eign in­vest­ment,” Bai said.

Lo­cal gov­ern­ments are re­quired to help trans­form public el­derly ser­vice in­sti­tu­tions into pri­vate en­ter­prises. By 2020, nurs­ing home beds in govern­ment-owned in­sti­tu­tions should take up less than half the to­tal, ac­cord­ing to the cir­cu­lar.

The govern­ment is also en­cour­ag­ing el­derly care in­sti­tu­tions to op­er­ate as med­i­cal and health in­sti­tu­tions. El­i­gi­ble cen­ters will be in­cluded in the ba­sic med­i­cal in­sur­ance sys­tem.

Con­tact the writ­ers at chen­meng­wei@ chi­

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