Aging is an inevitable trend in China and will be so for quite a long time. The ratio of labor supply, pressure on elderly care, pension system and healthcare will create lots of challenges. The Chinese government also pointed out that we should see the opportunity of “silver hair economy”, with an increasing market demand of senior citizen’s service and products.
The latest result of the 7th national census in China was released in May. People over 65 years old takes up 13.5% of the population, higher than the world average level (9.3%) but lower than the average level of developed countries (19.3%). With a big base population, the number of people over 65 is huge: 190 million.
China is stepping faster towards an aging society. From 2010-2020, the ratio of people over 60 has increased by 5.44%, and the ratio of people over 65 has increased by 4.63% compared to the figure 2.51% and 2.72% in the last decade. There is also a significant difference between urban and rural population. In the rural area, people over 60 takes up 23.81%, 7.99% higher than the ratio in urban areas. The reason besides economic development level is migration of young people towards cities.
It is not surprising to see this trend due to many reasons. The one child policy was implemented in China for over 3 decades, creating a sharp drop of the ratio of young people. A typical family structure in China is “2 people as a young couple, 4 middle-aged parents and 8 elderlies to be taken care of.”
Also, do you think the introduction could be shortened if possible? Maybe just retain the important sentences and data i guess?
Obstacles on the elderly care market: economics and policy
In the latest Government Work Report, the central government emphasized a lot on elderly care, especially on the elderly service. In the post-coronavirus era, China aims at improving elderly care service quality and “finding the Chinese solution to elderly care in the new era”. The current pension system covers 300 million people, the government promises to guarantee the bottom line of basic level pension, but the high-quality service is still lacking.
The government is opening the market to business, but the service market is not yet prosperous.
Economically¸ the purchase power of the elderly group is relatively low and the cost of elderly care service is quite high, not to mention its high risk and complicity by nature, Culturally, market has never been the main place for elderly care. Taking care of parents at home directly by kids has been a tradition and even virtue in China for thousands of years. In the 3 aspects of elderly care: homecare, community care and agency care, homecare is the absolute majority. Policy-wise, there ares also lots of restrictions on the positioning of social elderly care organizations. Lots of organizations have to register both non-profit and for-profit agents to legally operate, and many commercial spaces are not qualified to operate elderly care service.
More obstacles for business: high cost and lack of talent
In addition to policy restrictions, there are also lots of business factors limiting businesses to enter this market. A big one is difficulty in good human resource. Agencies can hardly find professional frontline service providers. Most practitioners are either not professionally trained, not well educated or well-trained but can’t stick to this career. The education, training and professional growth structure of such profession is not mature enough, and the income level and social status is not high enough to keep those who are actually well-trained. So, businesses can hardly hire good people or to keep them staying on the position .
From the supply side, the government needs to support business in this industry to lower cost like tax reduction policy, to broaden the access to enter the market and provide services so more innovative solutions can be implemented. From the demand side, the government should also find ways to improve senior citizens’ available income like increasing pension and social security expenditure to at least meet the inflation rate.
There is also good news. The education level of senior citizens is improving. 366.9 million people over 60 has at least went to ahigh school, and that’s 208.5 million more than 2010. The average life span is also increasing. There are 35.8 million people over 80 years old, taking up 2.54% of the population, 14.85 million and 0.98% higher than in 2010. Though the condition is hard, and threshold is still high, there are already many business trying to bring innovative solutions in the elderly care market.
Combining hospital care and homecare
A reporter in Chongqing, a big city in southwest China, visited a dozen of hospital and find that most beds are filled with senior citizens, many with serious disease or chronicle disease, with their kids taking care of them. The common case is that all kids have full-time jobs and have to take turns, and some kids have left their hometown so they have to pay a lot to hire help. Social workers to take care of elderlies are mainly from commercial agencies and are quite expensive to hire. In Chongqing, the average price is ￥200 per day (about $30), while the average annual disposable income in Chongqing is only ￥28920 (about $4131), making it around ￥79 per day (about $10) . Middle-aged people, who are usually not the only child, are already facing huge pressure, and people resigned to stay at home and the hospital to take care of their parents is no news. The one child policy would make it harder for the younger generation to take care of their parents under such tradition.
Businesses try to tackle the problem by combining hospital care and elderly care. The Chongqing government is organizing insurance company to work with elderly care agencies, so insurance company can offer compensate to elderlies who need long-term care, and agencies can provide high-quality nursery service in residential communities. Nurses and medical workers can pay visit to elderlies at home and provide services, with basic level, special level care and community-based rehabilitation all the way to hospice care. In this way, elderlies can stay at home while receiving professional affordable care.
Youths + Elderlies
In Hangzhou, a eastern costal city in China, an agency is trying to operate youth + elderly care model. The agency provides rent discount for young renters if they complete 20 hours of elderly care volunteer service. Their job is not nursing or professional service, but to take care of elderlies’ life quality and spiritual needs. The young people teach elderlies to use the latest phone apps, to organize group activities, watch movies or celebrate birthdays. With more elderlies now only have on children who might be working in another city, while young people seeking opportunities to lower living cost, this is a win-win situation. There are also agencies combining kids and elderly care: putting kindergartens in elderly nursing homes. Senior citizens need the vitality of kids and young people, little kids need care which can be provided by many elderlies. Elderlies can also achieve the need to social, and a sense of being “useful” and thus respected in the society.
These innovative solutions not only lowered the cost of elderly care, but also considered comprehensively the needs of elderlies, not only healthcare and material needs, but also the need to social with people from different ages, the need to be respected, and most importantly, they break the stigma of elderlies are “useless” to the society and only waiting to be taken care of. Senior citizens, most of them, have experience, time and energy to continue to contribute to social development as long as they are willing to, and it is important to include them in the society, not as normal “human resource” that can be priced by capital and employees, but as voluntary labor who are willing to give back to the younger generation. Being able to contribute is also important for many people to stay mentally healthy. All elderlies, like all other groups, are unique individuals, and it is important to analyze their different needs and capabilities and provide services and opportunities accordingly instead of treating them in a one-size fits all feature.