Silver Rush

China still heavily depends on home care for seniors. The country has a “90-7-3” elder care service system, with about 90 percent of the elderly living at home, 7 percent in community-based care centers, and 3 percent in nursing institutions. This three-pronged government scheme is mentioned in the country’s 14th Five-Year Plan (2021-2025). 　

“The development of these sectors is unbalanced, and home- and community-based elder care services are deficient,” Li Zhihong, director of the career development department of the China Aging Association, told NewsChina. 　

The Outline of the Strategic Plan for Expanding Domestic Demand (2022- 2035) issued by the Communist Party of China Central Committee and the State Council on December 14, 2022 plans to accelerate improvements to the system by coordinating home- and community-based elder care services and integrating medical care with healthcare services. 　

This approach considers both the Chinese tradition of living in the family home in old age and the growing need for social services to support the elderly, regardless of whether they live with their children. 

In 2014, Yang’s company was contracted by the city government to operate a community canteen offering free lunches to the elderly. However, few seniors living alone ventured to eat there. Fast forward to today, and the canteen now serves up to 500 to 600 meals a day to elderly residents from nearby communities. 　

This change did not come easily. Initially, Yang’s company focused on providing services contracted by the local government. However, sensing a market shift, Yang now believes the time is right for home and community-based elder care. 　

Home to one of China’s largest aging populations, Jiangsu faces an increasing elderly dependency ratio (ratio of the elderly population aged 65 and above per 100 working-age people between 15-64). 　

Wuxi, a manufacturing city ranking third in GDP and fifth in total population in Jiangsu, became an aging society as early as 1983 – 17 years before the rest of the country. By the end of 2022, people aged 60 and above made up 27 percent of Wuxi’s registered population, 7.38 percentage points higher than the national average. 　

Nanjing Fukangtong Health Industry in Wuxi specializes in home renovations for the elderly, such as equipment installation and accessibility designs. Wang Xiang, a manager at Fukangtong, told NewsChina that most home renovations the company takes on are funded by local authorities. Wuxi provides subsidies of up to 8,000 yuan (US$1,162) to each household requiring renovations. 　

Zhang Yufeng and her 81-year-old husband who live in the city’s Liangxi District have been approved for a renovation tailored to their needs. It involves replacing their old bathtub with a shower complete with a bath chair, wall-mounted handrails, slip resistant tiles and a bath mat. They also got a toilet overflow sensor and motion-sensor lighting. 　

China’s population is aging before it becomes a developed country, which threatens to stifle growth of the country’s elder care industry. Zhou Lijun, director of Wuxi’s civil affairs bureau, told NewsChina that pensioners who receive an average 3,000 to 5,000 yuan (US$436-726) per month have “modest consumption ability.” 　

Most of the older generation in China prioritize spending on their children and grandchildren. However, those of the post-1960s generation, who are in their 50s and 60s, are better educated, spend more and have greater demand for spiritual and cultural experiences. 　

A representative from the elder care service department at Jiangsu civil affairs bureau told NewsChina that the province plans to promote innovative projects this year catering to the aging population as a way to stimulate consumption. 　

In a 2021 nationwide survey of over 10,000 households, the Development Research Center of the State Council found that 90 percent of people prefer home-based elder care. Among them, nearly 50 percent said they are concerned that no one would be available to take care of them. Family care for the elderly has further weakened against the backdrop of China’s “4-2-1” family structure – four grandparents and two parents and a single child – a result of the one-child policy. 　

Wuxi is among the cities piloting reform of home-based and community-based elder care services included in the 2022 plan to expand domestic demand. Qian Xiaodong, a researcher with the Wuxi civil affairs bureau, told NewsChina that the city’s elder care services developed from the ground up. This year, the focus is on improving service quality to provide seniors with a greater sense of satisfaction and independence. 　

By the end of 2021, Wuxi had established 96 regional catering centers and over 500 catering service points. In 2022, the city upgraded 15 centers, bringing the total number of regional catering centers to 100. Qian Xiaodong revealed plans for 80 more centers in surrounding communities and rural villages. Wuxi also launched an action plan, aiming for comprehensive facilities in all residential districts by 2023 and subsidized home renovations for 2,000 senior citizens. 　

Other provinces are also strengthening elder care services. For example, Hubei Province plans to build 100 community complexes, while Fujian Province aims to establish 300 cafeterias and 50 community centers. 

In 2021, a survey by the Development Research Center of the State Council found that nearly 50 percent of respondents prioritized medical services in elder care, but only 8.9 percent of cities and towns provided home medical care. 　

In response, the National Health Commission and other agencies issued a notice to improve the community medical and nursing care. By September 2022, the Ministry of Civil Affairs and the Ministry of Finance announced plans to provide 100,000 specially-equipped in-home beds and 200,000 home care visits in 42 districts across the country. 　

Local health departments are providing home services based on need. In February 2023, an official from the Wuxi Municipal Health Commission told NewsChina that disabled senior patients in stable health with clear treatment plans are eligible for home-based care. This allows medical personnel from public primary medical institutions to provide geriatric care including on-site diagnosis and treatment, examinations, basic nursing and other services. The local health insurance bureau said that home-based care is covered by national medical insurance. 　

But financial incentives are an obstacle for integrated medical and elder care services. 　

In June 2021, the Beijing Municipal Commission of Health released a working plan that set the price of on-site services from 50 to 70 yuan (US$7-10) per visit. Medical workers can conduct six home-based medical visits a day, making between 300 and 600 yuan (US$44-73). Shanghai and provinces such as Shaanxi, Guangdong and Jiangsu are also exploring ways to optimize incentives for family doctors. 　

Another challenge is coordination between different departments. According to the State Council, China’s cabinet, the implementation of policies for managing the aging population as laid out by the National Health Commission has been assigned to the Ministry of Civil Affairs. 　

Professor Xue Lan, dean of Tsinghua University’s Schwarzman College, told NewsChina that different departments previously handled such work. The system and its mechanisms have become more streamlined following the reshuffle, Xue said. 　

NewsChina learned that cities like Guangzhou, Shanghai, Nanjing and Wuxi are working on integrating assessment standards. 　

Feng Wenmeng, a researcher at the Development Research Center of the State Council, asserts that incentivizing long-term care insurance is crucial for marketizing community and home-based elder care services. 　

Feng said Japan launched its long-term care insurance (LTCI) in 2000, which requires all citizens to pay premiums, typically less than 3 percent of their annual incomes, starting at 40 years old. Upon reaching 65, they gain access to elder care services. 　

China also initiated pilot programs for long-term care insurance in 2016, covering 145 million people across 49 cities. Funding is sourced from basic medical insurance, individual contributions, subsidies and other channels, allowing those insured to purchase third-party or home-based care services. 

According to industry insiders, there is market potential for specialized elder care homes and community care service providers, as customers may pay a premium for tailored services. China needs more facilities and personnel for elder care. However, facing this uncontested market, the challenge for service providers is to explore a sustainable development model. 　

“The home- and community-care service industry offers meager profit potential,” Qian Xiaodong said. Compared to nursing homes, such services target a broader age range and economic bracket. The range and complexity of services required present significant challenges to service providers. 　

Wang Xiang told NewsChina that to avoid operating at a deficit, his food services company must meticulously calculate factors such as the number of meals per batch, how many chefs are needed and delivery costs. “With each meal priced at about 10-12 yuan (US$1.45- 1.74) profiting an average 1.5 to 2 yuan (US$0.22-0.29), labor costs alone will offset the meager profits,” Wang said. 　

In addition, elderly care services are predominantly non-profit. In most cities, both the government and enterprises have to provide resources. Consequently, their availability depends on the determination and financial strength of respective local governments. 　

Li Zhihong said that based on experiences in developed countries, the elder care industry initially starts as a state-funded, non-profit welfare undertaking. When a country’s per capita GDP reaches US$8,000-13,000, the industry enters a growth phase, focused on balancing welfare and industry development. At per capita GDP of US$13,000-26,000, the elderly care service industry matures, emphasizing market-oriented development. In 2022, China’s per capita GDP surpassed US$12,000, indicating the industry is on the verge of entering its mature phase.　

In 2021, Wuxi’s market expanded as demand for government-purchased home-based services for the elderly rose. Previously limited to two elder care service providers, Wuxi now has five enterprises partnering with the local government. 　

“Elder care services require more than just enterprise support. The government should first give us a ‘pool’ to swim in,” Wang Xiao said. Scale operation is essential, and while Fukangtong provides home care services in provinces such as Jiangsu, Anhui and Shandong, their reach is limited to just several communities. In contrast, Wuxi’s Liangxi District allows them to operate on a much larger scale, covering over 70 square kilometers and serving around one million permanent residents. 　

Wang said that because of this much bigger service area, Fukangtong has employed over 300 housecleaners and over 100 nurses for the elderly of Liangxi District. Despite offering lower housecleaning rates, the steady market demand keeps employees satisfied. Wang’s company is also expanding their offerings, seeking profitable businesses opportunities such as adaptive innovation facilities for seniors. 　

Similarly, Taifu Elderly Care Service, Yang Li’s employer, launched market-oriented health care products and services alongside their government-contracted elderly canteens. Yang said the company offers food samples such as wonton, dumplings and stewed dishes for diners to try out and purchase. Taifu is also exploring long-term home care services for disabled and semi-disabled seniors. 　

Li Zhihong told NewsChina that elder care services should prioritize developing a comprehensive system with clear responsibilities for government, social organizations, enterprises and families, ensuring accessible basic care and public health services for all. Additionally, the elderly should be seen as a resource, not a burden. Li emphasized the need to engage market entities and social organizations to offer market-oriented products and services, tapping into the consumption potential of the elderly in areas such as culture, sports, tourism, finance and education. “We need to truly stimulate their economic vitality in these aspects,” Li added. 　

“Elder care is a societal concern, not only a civil affairs issue,” said Zhou Lijun. “In cultivating the elder care market, we need to explore more market-driven and socialized solutions, urge adult children to be attentive to their elderly family members’ needs, and for all parties to work together in understanding the aging population,” he added.