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(December 5, 2011)
Increasing elderly population and burgeoning wealth open up market
BEIJING - Of all the unexpected things in Chinese society, moving into a nursing home is one ofthe most unusual.
Nursing homes in China may appear very large and glamorous on the outside, but sometimeswhat's on the inside reveals a totally different picture. Unlike those in some developed Westerncountries, experts say many nursing homes in China are overcrowded, receive inadequategovernment funding, have poor amenities and are often staffed by rural migrant workers withno professional training in the care of the elderly.
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 A senior citizen eats lunch beside a temple wall inNantong, in East China's Jiangsu province. China'sincreasingly aging population has led to rising demandfor nursing homes. Xu Congjun / For China Daily
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Chinese people feelashamed or embarrassedto put their relatives"away" in nursing homes,but in many cases, it isthe last or only resort.
The family structure in Chinais changing: Women, whoonce supported the family athome, have entered the workforce in greater numbers.Chinese society has becomemuch more educated. Peoplewho have better jobs andbusier lives as a consequenceare among those who havestrayed from the strongtradition of filial piety and arethus helping to create thenursing home phenomenon.
This is where East meetsWest. Global investors havecaught on to China's boom incare for the elderly. Given thecountry's enormouspopulation, this socio-demographic shift symbolizesan opportunity for companiesand investors to move into anincreasingly lucrative andrelatively untapped market.
The statistics
According to the NationalBureau of Statistics, Chinanow has more than 178 million people aged 60 or older, approximately 13 percent of thepopulation. By 2042, the elderly will account for more than 30 percent of the population andChina will have the biggest aging-society problem of any country in the world, exacerbatedlargely by its one-child policy. The average lifespan of a Chinese citizen is now 73 years.
"The main issue is not that the population will age - that's a given," said Gordon Orr, director atMcKinsey & Co, a global management consultancy. "It's how the government can afford to payolder workers, in terms of pension and other healthcare benefits."
Local governments are discovering that demand far exceeds supply. In rural China, 40 millionelderly people will be living on their own during the 12th Five-Year Plan period (2011-2015)because their children are working elsewhere, testing the country's social services andinsurance system.
Wu Yushao, deputy director of the Office of China National Committee on Aging, says thesituation poses a huge challenge for China. "Services for the elderly are too weak to handle thesituation and the welfare system is still backward and a large number of senior citizens in ruralareas are not included," the Xinhua news agency quoted Wu as saying.
Nonetheless, the majority of care homes in rural China are funded and, in most cases,operated by local governments.
Until recently, the central government's focus had predominantly been on the lower socio-economic group in rural areas, an argument that explains why there hasn't been muchprofessional development in the sector.
"The reason why we have not done more work in China is because there was little provision inthe middle-income groups and very little in the high-income area," said David Lane ofThomsonAdsett & Partners Pty Ltd, an Australian consulting company that has worked in thesector in Asia since the 1990s.
"Most of them (developers and operators) can only really support the employment of localarchitects with very limited international assistance," he said.
Now, with China facing an aging population, the government has welcomed private and foreigninvestors to help cover the shortfall in facilities for care of the elderly. Private companiesdominate the nursing home sector in most major cities.
Although it is hard to determine exactly what percentage of the elderly rely almost exclusivelyon the family for support, a study earlier this year by US gerontologists and Chineseacademics, published in the Journal of the American Geriatrics Society, indicates that thenumber of elderly people moving into nursing homes in Chinese cities is soaring.
The study, led by Zhanlian Feng, assistant professor of Health Services, Policy and Practicewith the Center for Gerontology and Health Care Research at Brown University in the US,surveyed seven Chinese cities and discovered a growing number of care homes for seniorcitizens.
The ancient capital of Nanjing, in Jiangsu province, for example, had 27 homes in 1990 and 52a decade later. By 2009, the number had risen to 148. Beijing and Tianjin showed similargrowth, while Shanghai had 552 facilities by the same year.
Despite this sudden growth, many industry leaders believe that the market is still immature andhas the potential for enormous growth.
ThomsonAdsett is currently working on numerous projects in Beijing and two in Shanghai, whilebidding for further work in Foshan in Guangdong province, Dalian in Liaoning province, Wuxi inJiangsu province, Wuhan in Hubei province and the municipality of Chong-qing.
"I expect the level of inquiry (from investors and developers) will continue to increase rapidlyover the next five years," said Lane.
Official records also show that the number of available beds in nursing homes can only caterfor 1.8 percent of China's elderly population, whereas the standard in many Western countriesis between 5 and 7 percent.
"We'll need to increase the number by 3.4 million beds to accommodate 3 percent over the nextfive years," said Li Jianguo, vice-chairman and general-secretary of the Standing Committee ofthe National People's Congress, in March.
Over the 12th Five-Year Plan period, the government intends to increase pension coverage,expand home-care services and build more nursing homes. But despite their push for moreoutside input and more favorable policies on land, water, power and taxation in the elderly caresector, businesses are aware of the loopholes and the financial risks - particularly because ofthe great degree of apprehension about how the general public views care for the elderly andretirement facilities.
Source from Chinadaily.com.cn
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