Re­form: El­derly care eyes more funds

China Daily (Latin America Weekly) - - Business -

will in­te­grate its re­sources in clients, in­sur­ance prod­ucts and health­care. Both par­ties aim at build­ing a high-qual­ity brand in China’s pen­sioner care ser­vices.

“Our co­op­er­a­tion (with Taikang) is ex­pected to in­ject new vi­tal­ity into the Chi­nese se­nior-care in­dus­try,” said Gao Tianli, pres­i­dent of Orpea’s China unit.

Else­where, var­i­ous gov­ern­ment de­part­ments con­cerned are re­search­ing the sec­tor in­ten­sively and hold­ing sem­i­nars.

Ad­min­is­tra­tive pro­ce­dures are be­ing sim­pli­fied to ex­pe­dite pri­vate in­vest­ments in the sec­tor. At the same time, state in­sti­tu­tions in el­derly care are be­ing re­formed and mod­ern­ized.

That’s not all. The gov­ern­ment said it will im­prove the pol­icy on fi­nan­cial sup­port for el­derly care projects. This is ex­pected to in­crease in­vest­ments as well as fi­nanc­ing chan­nels, and bet­ter co­or­di­nate plan­ning for bal­anced ur­ban-ru­ral distri­bu­tion of projects and ju­di­cious land use.

The net re­sult of all these mea­sures could be not only that sup­ply of el­derly care ser­vices will rise to meet de­mand but the qual­ity of the in­dus­try will likely im­prove, mar­ket in­sid­ers said.

Ac­cord­ing to a re­cent re­port by mar­ket re­search firm ASKCI Con­sult­ing, state in­sti­tu­tions out­num­ber pri­vate­sec­tor ser­vices in China’s el­derly care mar­ket. The de­mand-sup­ply gap has been widen­ing, es­pe­cially in terms of beds.

In 2016, there were 28,500 nurs­ing homes for the el­derly in China of­fer­ing 7.8 mil­lion beds. In other words, for ev­ery 1,000 el­derly peo­ple, there were only around 34 beds avail­able, a far cry from the sit­u­a­tion in de­vel­oped coun­tries.

Even though the num­ber of el­derly homes will sur­pass 30,000 this year, the po­ten­tial for fu­ture growth re­mains huge, ex­perts said.

Li Chang’an, a pro­fes­sor with the School of Pub­lic Ad­min­is­tra­tion of the Univer­sity of In­ter­na­tional Busi­ness and Eco­nom­ics, Bei­jing, said: “The in­tro­duc­tion of for­eign in­vest­ment can make up for the cap­i­tal short­age. Although the coun­try has al­ways been ac­tively rais­ing funds for the el­derly care in­dus­try, the fund­ing gap is still huge. The en­try of for­eign cap­i­tal will help in­crease sup­ply.

“In ad­di­tion, through the in­tro­duc­tion of for­eign cap­i­tal, the qual­ity of the na­tion’s el­derly care ser­vices can be raised. We can learn from ad­vanced man­age­ment, ex­per­tise, ser­vice con­cepts and tech­nolo­gies of for­eign com­pa­nies in the sec­tor, to im­prove the ser­vice qual­ity in China.”

He said many for­eign in­sti­tu­tions ap­pear to tar­get pen­sion­ers in the medium to high­end con­sump­tion groups in China. Although ser­vices in these seg­ments tend to be costlier and the num­ber of tar­get con­sumers rel­a­tively lim­ited, the ex­pected en­try of for­eign firms will likely meet peo­ple’s in­creas­ingly di­verse needs.

Ren Yuan, a pro­fes­sor with the School of So­cial De­vel­op­ment and Pub­lic Pol­icy of Fu­dan Univer­sity, said: “Now is the best time for for­eign cap­i­tal to en­ter the mar­ket for Chi­nese pen­sion­ers. The com­pe­ti­tion will only get fiercer from now on.”

Song Nan con­trib­uted to this story.

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