Bohua Xu is an assistant manager in the strategy consulting department of the Jones Lang LaSalle Beijing office. He was a delegate to the 2015 Australia-China Youth Dialogue in Brisbane.
Ageing populations present policy challenges for both Australia and China. The number of Chinese people aged over 60 has reached 202 million, representing 15.5 per cent of the population. This percentage of over 60 year-olds is up from 7 per cent in 1953, and is projected to each 24 per cent (or 302 million people) by 2050. In Australia, it is predicted that 22 per cent of the population will be over 60 years of age by 2017.
This change in population structure creates a strong need for more planning to overcome related challenges. This is especially the case in China, as the recently repealed one-child policy has created a generation of only-child couples who will have to shoulder the burden of taking care of two sets of grandparents as well as their children.
It was in this context that 15 Australian and 15 Chinese future leaders and young professionals came together late last year for the sixth annual Australia-China Youth Dialogue in Brisbane. It included an insightful session on urbanisation and sustainable development, for which an ageing society is a critical issue.
This session discussed a number of major challenges facing Chinese policymakers responding to ageing populations.
First, traditional Chinese family culture emphasises taking care of elderly relatives at home. Children who send their parents to nursing homes are looked down upon by society.
Second, there is a great disparity in elderly care needs in urban and rural areas. Rural China is experiencing a much greater pace of ageing than in cities, as the younger generations in townships and villages head in droves to the metropolises for better work opportunities, Furthermore, according to statistics in China’s Social Blue Paper, rural pensions are 24-times lower than those in cities.
Third, there are imbalances in healthcare levels between employees working at state-owned enterprises and those working at private firms.
Fourth, the aged care industry in China is still very immature. There exists a basic community care system, but it still needs to be professionalised and lacks any kind of personalised service.
Fifth, the main body of the pension service is vague. Citizens expect the government to take more responsibility for the aged, yet social participation and commercial pension systems could also play more important roles.
In recent years, the Chinese government has published a series of policies to promote the sustainable development of the ageing service, such as the national ’90-7-3’ policy and the ’90-6-4’ policies in Shanghai and Beijing. These policy slogans refer to proposals for 90 per cent of the elderly to be cared for at home, 7 per cent (6 per cent) at community care centres, and the remaining 3 per cent (4 per cent) at nursing homes.
Many healthcare companies and property developers have already seen the business opportunities associated with an ageing population. The national government is also encouraging insurance companies to reinvest in the aged care industry. Some firms are creating new products for the Chinese elderly, such as professional home care services, multi-generation housing designs and global healthcare ‘green channels’.
There are opportunities for Australia too, as the China-Australia Free Trade Agreement (ChAFTA) gives Australian companies preferential treatment by allowing them to own and operate aged care facilities in China.
What is the future of the ageing population in China? And what is the direction of the market for aged care products? Will it be the ‘rental model’ that predominates in the US, or the ‘purchase model’ that prevails in Australia?
In China, the market should encourage more options in order to cater to different customers with different demands. Australia has relatively mature policies in place for the elderly: superannuation and pension funds, financial products such as reverse mortgages, and advanced healthcare systems and technologies. In the context of ChAFTA, aged care is a promising opportunity for bilateral exchange in technologies, services, markets and business models.
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