China's New Elderly Care Regulation Opens up to Foreign Investment
April 25, 2019 | BY
Marilyn RomeroThe recent regulation on elderly care services by China's State Council will open up the market, and encourages more foreign investment.
Aging populations pose serious challenges for the health and long-term care systems in many countries around the world, according to the U.S. National Library of Medicine. The challenges are particularly acute in China, where demographic shifts are rapid, exacerbated by the recent one-child family policy.
China's State Council has recently released a regulation that seeks to establish a supervision system on elderly care services and deepen reform on public-funded elderly care organs, as the government continues to seek ways to address its aging society. The regulation, released by the State Council General Office, has six sections and 28 measures. It seeks to improve precise investment by the government and requires the protection of the rights and interests of the elderly.
Additionally, the regulation calls for the establishment of a system that recognizes the skills of caregivers and provides them with more education and training opportunities. To help drive the sector's development, it requires the extension of channels for investing and financing, and expanding employment and entrepreneurship.
China has already made some progress in improving the country's elderly care system. As of the end of 2018, the country was home to 163,800 elderly care institutions and facilities offering about 7.5 million beds for senior citizens.
The figure, however, pales into insignificance when compared to demand. China currently has nearly 250 million senior citizens at the age of 60 or above. Nursing homes currently only provide three beds for every 100 senior citizens in the country.
Premier Li Keqiang acknowledged the seriousness of the problem in his address to the Two Sessions in March, when he said that the Chinese government will push for more financing support to accelerate the development of the elderly care industry. The new regulation is aimed in part at addressing that issue by cutting fundraising costs for elderly care institutions, and encouraging them to raise capital through public listings and bond issues. The new regulation also allows insurance funds to invest more in elderly care projects, and encourages financial institutions to offer affordable lending to providers of elderly care services.
Foreign investment in the sector is also being strongly promoted. “Nursing homes for the elderly, founded by overseas investors in mainland China, will get treatment equal to domestic companies as long as they admit disadvantaged seniors whose care would be covered by the government,” said Gao Xiaobing, vice-minister of civil affairs, at a policy briefing on April 16 hosted by the State Council Information Office.
The new regulation follows on from the State Council's five-year plan on elderly care, released in early 2017. The goals of the plan, which are for the years from 2016 to 2020, include covering 90 percent of urban workers and urban and rural residents under a basic, old-age insurance scheme; and for 95 percent of citizens to be covered by basic health insurance. Private capital and non-governmental organizations are also encouraged into the elderly care market, according to the plan. By 2020, elderly care beds provided by the government should account for no more than 50 percent of the total; with the private sector providing the other half.
The market is huge. According to the plan, by 2020, the elderly population over 60 years old will reach approximately 255 million, accounting for 17.8 percent of the total population of the country. Of that, the number of older people living alone will reach 118 million.
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