Sunrise sector brightens sunset years
China’s elderly care market is set for a giant leap on entry of foreign capital
Economic risk or hidden opportunity? Or, is it a potential game-changer, even an economic growth driver?
These days, such questions divide experts debating demographic forecasts that China would soon become an aging society, slowing the Chinese economic juggernaut.
Thanks to an imaginative tweak of the country’s reform and opening-up policy, the threat seen in an aging society may turn out to be a huge business opportunity, experts said.
By the end of 2017, there were 241 million Chinese, or 17 percent of the population, aged 60 or above. And 158 million of them, or more than 11 percent of the population, were aged 65 or above, as per the data of the National Bureau of Statistics.
The country’s elderly population is increasing by 10 million annually. It is estimated that by 2020, those aged 65 or over will account for 14 percent of the population.
A forecast from the World Health Organization said that by 2050, more than 35 percent of the Chinese population will be aged 60 or above, which would make China the country with the most number of aging people.
In any other country, such figures might trigger alarm bells, given the adverse impact that an aging society has had on the Japanese economy in recent years; but in China, the discourse acquired a parallel track with a positive charge.
A report from the Chinese Academy of Social Sciences said elderly care is a sunrise industry whose annual sales could reach an estimated 13 trillion yuan ($1.87 trillion) by 2030 from the current 5.9 billion yuan.
Such stupendous growth is expected on the basis of the experiences of developed countries. A large base of aging people in an economy that has seen both restructuring and sustained rapid growth is a perfect recipe for growing a sophisticated market for senior-care services.
That’s because people would have benefited from rising incomes and saved a bit in the past for a stable, financially stress-free post-retirement life, experts said.
On top of that, when new policy measures enable foreign investment in the potentially lucrative elderly care sector, what could have been a risk may prove to be one of the drivers of economic growth, they said.
Such interpretations appear plausible in a private nursing home in Weihai, Shandong province. Here, Sun Ying, 85, and her husband Zhang Wei, 86, experience their sunset years in quiet contentment and peace, in spite of Zhang’s neurological condition that was detected three years ago.
Their peace appears to arise from the fact that they live in a community of similar age people. The community is a commercial venture that is operated by professionals who deliver services tailored to exacting standards.
The nursing home, called Dongfa House, was Sun and Zhang’s choice when they realized they needed care. They did not want to be a burden on their children who live hectic lives.
Sun said: “Here (in the nursing home), each of us has a health record. Our BP (blood pressure) is checked once a week. We receive medical attention whenever required. I enjoy reading books every day, while my husband often plays with his poker-mates.
“Sometimes, student volunteers come here to perform for us. Compared with public nursing homes, we find the staff here to be more patient. Our lives have been enriched.”
So are lives of all the stakeholders concerned — nurses, care-givers, doctors, physiotherapists, attendants, plumbers, electricians, mechanics, construction workers, florists, material suppliers, providers of various other services.
An elderly care project entails a plethora of investments, activities and services. Done on a mass scale across a vast country like China, it could help drive economic growth, experts said.
For instance, the nursing home that Sun and her husband live in charges a monthly fee of 2,140 yuan per person. They live in a mid-range 30-square-meter apartment. A high-end apartment could cost 2,460 yuan per person per month.
The fee includes a buffet meal every day. Residents undergo a physical before admission; the practice ensures no one with infectious diseases gets admitted.
There are many takers for modern elderly care services in China. Stated differently, demand outstrips supply. So, the government has amended regulations to allow the private sector to set up profit-oriented businesses in elderly care. Small wonder, foreign investors are lining up to back a range of projects in this segment.
Already, 29 provinces and autonomous regions have decided to open up their elderly care markets. And 26 of them have proposed foreign investment in the segment.
In fact, in January, China’s Taikang Community, a privately
MA XUEJING AND SU JINGBO / CHINA DAILY
held firm, teamed up with French senior-care company Orpea, to set up a joint venture on the Chinese mainland.
According to their strategic partnership, the two entities will cooperate and explore the market for urban-type nursing
homes and rehabilitation centers in China.
Orpea will provide its advanced care techniques as well as bring standards and processes. For its part, Taikang