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China's Rapidly Aging Population Strains Resources 

  • Shannon Van Sant

A group of elderly men take a rest on their wheelchairs at a park in Beijing, (File photo).

A group of elderly men take a rest on their wheelchairs at a park in Beijing, (File photo).

As China’s baby boomers age, the country’s health care resources are increasingly strapped – for funding and investment.

Last month a fire swept through a nursing home in China’s Henan Province, killing 38 people. Only seven of the 51 residents who lived at the home escaped unharmed.

Chinese society has traditionally placed a premium on caring for and honoring its elderly, but there are signs of trouble in an elder care industry that faces a rapidly aging population.

By the end of last year China’s elderly comprised 14 percent of its population. That figure is expected to grow to 25 percent by 2030. Ben Simpfendorfer is Managing Director of Silk Road Associates.

“In the youth population workers aged less than 30 years is actually declining by tens of millions of people over the next decade or so, and the result of that is that there are growing numbers of elderly, but fewer numbers of workers to look after them," said Simpfendorfer.

According to China’s Ministry of Civil Affairs, the country only has 2.1 nursing home beds for every 1,000 seniors. A 2010 census found that nearly 13 percent of the population of Henan Province, where the nursing home fire happened, was elderly.

Despite an expanded social security scheme under China’s former President Hu Jintao, rural elderly care remains underfunded. Many in rural China say they rely on personal income to provide care for their aging relatives, and nursing homes are often home to those without family members or the extremely poor.

Profit margins at most countryside nursing homes remain slim, and an investigation revealed that highly flammable material was used as insulation in the Henan nursing home. According to reports fire resistant sheet metal was too expensive and unavailable in Lushan County, where the home was located.
Lack of government funding and resources worries physicians such as mainland-China based psychiatrist Dr. Michael Phillips. Some 23 percent of China’s elderly population fall below the poverty line and are afflicted by high rates of depression and dementia.

“This bulge in the aging population which automatically has substantial numbers of demented people, is coming. And I look at myself as a psychiatrist, and think my God, it’s going to take over all the social resources available," said Phillips.

The lack of current resources for China’s aging population presents some opportunities for private investors. The number of nursing homes in the seaside city of Tianjin grew from 11 in 1990 to more than 136 in 2011. China’s pharmaceuticals industry is also booming. Raymond Yeung is a senior economist with ANZ.

“An increasingly aged population also comes with some peripheral industries that can be derived from the aging population, for example, long term care, and elderly care in general, such as in pharmaceuticals," said Yeung.

Yeung says some investors may rush to fill a gap in state funding for China’s aging population.

In the meantime, China’s lack of enforcement of safety standards and secure facilities for the elderly risks future disasters. Last month’s fire followed one which swept through a Heilongjiang province nursing home in July of 2013. That fire killed 11 nursing home residents.

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