Rise in China’s Aging Poses Challenge to Beijing

NYT DIDI KIRSTEN TATLOW September 10, 2012

Forty minutes’ drive east of Beijing in Yanjiao, a town just inside the border of neighboring Hebei Province, a vast care facility for the elderly is rising in green fields, part of a solution to one of China’s most pressing challenges: fast-growing numbers of elderly people.

A retirement home on the outskirts of Shanghai. Official planners assume that the vast majority of the elderly will continue to be cared for at home.

By about 2015, 12,000 places will be available at the facility, the private Yanda Golden Age Health Nursing Center, and a further 3,000 beds will be available in its affiliated, state-of-the-art hospital, both part of the sprawling Yanda International Health City.

The places will be needed. By 2015 there will be 220 million people more than 60 years old in China, compared with about 180 million today. Encouraged by Mao Zedong, who believed more was better, China’s population boomed in the middle of the past century. Rapid growth was cut short in 1979 when the state introduced the one-child policy.

Within 40 years, China will have nearly 500 million elderly people, according to current projections, or about one-third of its future population of nearly 1.5 billion, which will put a huge strain on its financial and human resources, experts say.

“There is no country in the world that is facing such a big aging population problem,” said Yuan Xin, a professor and director of the Aging Development Strategy Research Center at Nankai University in Tianjin and a member of a government committee drawing up new policies, to be announced at the end of the year. The state sees the problem and is preparing, Mr. Yuan said. But it cannot solve it alone.

“The most difficult thing for China is that it will face the problem within the next 40 years,” he said by phone. “That’s a short time.”

“The government cannot take on this whole burden,” he said “It has to be shared by the government, by society, families and by individuals.”

In fact, neither the state nor the private sector is sure how to cope, said Xue Shan, general manager at the Yanda facility.

“It’s a new road for us, and we are ‘feeling the stones as we cross the river,”’ he said, quoting a Chinese proverb during an interview in his office.

This much is certain, experts say: The crunch is coming, and it will be an enormous business opportunity.

The government’s new policies are likely to continue a basic concept already in place, called Nine-Seven-Three: 90 percent of old people will remain at home; 7 percent will enter affordable, government-sponsored care, and 3 percent will live in private, expensive facilities like Yanda.

Mr. Yuan predicted that over time, the proportions would shift slightly, with about 80 percent of the elderly aging at home. He pointed out the considerable social shame attached in China to sending parents to old-age homes, considered by many an unfilial act.

Those family ties, though, are fraying. A recent poll by CCTV, the state broadcaster, drew widespread attention for its findings that about 33 percent of people surveyed visited their parents just once a year, and nearly 12 percent said they had not been home “in many years.” More than 16 percent of grown children saw their parents once a week, CCTV reported. And for many young people living far from home, working in the big cities, it is difficult to get home to care for aging parents. “China is becoming an empty-nest society,” Mr. Xue said.

But a richer one: Mr. Xue predicted that eventually, more than 3 percent of all Chinese would be able to afford private facilities like Yanda, where a bed in a two-bedroom apartment costs about 5,500 to 13,700 renminbi a month, or $880 to $2,150, depending on the level of nursing care. That is peanuts compared with the $4,000 to $6,000 monthly fees at assisted-living facilities in the United States, but still far above the means of most Chinese families.

Mr. Xue acknowledged that his facility was only a small part of the picture. “Solutions to the issue will vary,” he said. “The state does what we call Stage 1, the lower end. We do the top end.”

The real need, he added, is in the affordable range, which is subsidized by the state. Mr. Yuan said there were between seven million and eight million beds in the country. In July, China Economic Weekly magazine reported the government-run Beijing No. 1 Social Welfare Home, where a bed costs $110 to $570 a month, had a waiting list of more than 9,000.

Costs for government-financed places will be covered by a mixture of national and local government spending, with individuals’ pensions also contributing, Mr. Yuan said. He pointed out that the pension system was undergoing an overhaul, in part to cope with the challenge.

Whatever income group new old-age homes are designed to serve, the number of beds across China will have to rise fast, experts agree. That means more business — for somebody. Mr. Yuan did a quick calculation: 500 million old people paying 1,000 renminbi a month, comes to half a trillion renminbi a month.

How much foreign companies will be allowed to take part in that boom is unclear. Under the law, foreign providers of care for the elderly cannot run centers in China on their own but must find Chinese partners — a policy Mr. Yuan described as one of many that were “outdated” and “unreasonable.” Yanda is exploring cooperation deals with providers in the United States, Japan and Europe. Consulting contracts are also being signed with foreign businesses, from which Chinese companies can learn how to operate.

How to pay for this is equally unclear. By 2050, just 52 percent of the population will be of working age, Mr. Yuan said. Its members will need to support the 34 percent who are elderly and the 16 percent who are children. “How can China maintain its economic growth?” he asked.

In the meantime, governments are working on the infrastructure. In Beijing, the municipal government has decided it must earmark large areas of land for care for the elderly, in the same way land is designated for food markets or schools, The Beijing News reported in July.

The newspaper cited Chen Gang, the Communist Party secretary of the Chaoyang district of Beijing, as saying the city planned to allocate land along a highway circling the city’s suburbs for such facilities. “We’ll take that green, empty space and solve the problem of how to group old people together,” Mr. Chen said, according to the report.

At Yanda, they are already doing that. High-rise buildings rise in three long lines, each representing a stage in care: independent living, semi-assisted living and assisted living, Guo Pengfei, general manager of the facility’s marketing center, said during a recent tour of the site.

Lower buildings house the facilities found in any high-level care center for the elderly: a community center, restaurant, an “old people’s university,” a swimming pool, a reading room and, because this is China, a calligraphy room. At the front of the facility is a hospital, a state-of-the-art facility that is also open to the public.

So far, some 200 people live in the apartments, mostly retired government workers on generous pensions, Mr. Xue said. “We do also have some people from the private economy,” he said.

Yanda also offers something unusual for an old-age home in atheist China: religious facilities. The complex houses a traditional red and yellow Buddhist temple, a Protestant church, a Catholic church and a mosque. Their presence points to one of Yanda’s major ambitions: attracting wealthy overseas Chinese back home to grow old. “We know that overseas Chinese are often quite religious, so we built these,” said Mr. Guo, gesturing at the modest buildings. “We had to get special permission.”

Inside the Protestant Immanuel Church, Li Ruqi, 87, and his 85-year-old wife, who gave her name only as Ms. Yan (Chinese women do not change their names when they marry) said they were “empty-nesters.” Their five children all live in the United States and Canada.

“It’s very nice here,” Ms. Yan said, smiling happily as her husband nodded agreement. “The food is great. You can order what you want, though we cook at home, too. There’s a lot to do.”

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