Monday, 9 July 2012

The ageing of China: A growing challenge

The story is set about 100 years ago. It took place in a rural mountainous area in northern Japan, in a village beset with bad harvest and facing chronic starvation. Local custom mandated that the elderly, upon reaching 70 years of age, must retreat to the summit of Mount Narayama to die.

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Guanyu 道 said...

The ageing of China: A growing challenge

Yew Sung Pei
09 July 2012

The story is set about 100 years ago. It took place in a rural mountainous area in northern Japan, in a village beset with bad harvest and facing chronic starvation. Local custom mandated that the elderly, upon reaching 70 years of age, must retreat to the summit of Mount Narayama to die.

The haunting reality, according to The Ballad of Narayama, a 1982 Cannes Film Festival Grand Prize winner, is that group survival takes precedence over the individual. One particular touching scene was that of a healthy elderly woman crushing her healthy set of teeth against a wooden table, to leave as tiny tokens for her family to remember her by.

While the scenes painted above are extreme, today’s challenge of caring for the elderly is one many countries need to face, including a developing China.

China is already experiencing a mounting demographic challenge. As the only country with more than 100 million elderly people, it needs to tackle the problem quickly before it undermines the country’s future growth. And of equal importance is the question: will China’s imminent “demographic tsunami” unravel progress the country has made over the years?

According to the United Nations, a city in which 10 per cent or more of its population is over 60 is an ageing city. By that standard, China makes the grade. It has about 176 million people aged 60 or older, equivalent to roughly 13.3 per cent of its population. By 2020, this figure is projected to grow to 243 million, or 18 per cent of the population.

China’s rapidly ageing population - partly a result of its one-child policy - has strained the country’s services, including housing and medical facilities. Moreover, the rising number of elderly has increased social tensions. According to a report in the People’s Daily late last year, young couples “bear heavy mortgages as well as educational and medical burdens”, and often “find it hard to take care of four grandparents at the same time”.

Adding to the problem is the fact that Chinese people are living longer as well: the average lifespan has increased from pre-liberation days of just 42 years to 82 today.

Potential dilemmas

Unlike some other countries, China has to reconcile a dilemma when resolving the ageing problem. In an eastern society like China, piety towards one’s elders is such an important part of the culture that it is enshrined in the country’s Constitution. The Chinese government does not wish to send the wrong signal that institutionalising the elderly is the way to go. And despite its huge foreign reserves, it cannot afford to subsidise elderly care now without risking it becoming a long-term commitment.

However, left unattended, the issue might become a source of public discontent. The problems of a rapidly ageing Chinese population are compounded by another associated problem: many elderly have limited pension coverage, with some having no coverage at all.

Many Chinese increasingly find themselves excluded from coverage as China moves to a free-market economy. There is concern that unless something is done, China might become a nation of impoverished elders with no means to take care of themselves.

Therefore, Chinese healthcare providers and potential foreign investors in the “silver industry” would do well to understand this public-private dichotomy to ensure that interests on both sides are met. Public-private collaboration remains an invaluable approach for the Chinese government, to build a sustainable elder-living model where active ageing and care within the community are provided. This will in turn decrease the need to institutionalise the elderly.

Guanyu 道 said...

China is by no means alone in facing the problem of an ageing population. In Singapore, the proportion of the population aged 65 years or older is now 7.3 per cent, and expected to reach 19 per cent by 2030.

Globally, the proportion of older people grew at a rate of 2 per cent annually, faster than the growth in the population overall. For Asia to provide adequately for a surge in the number of seniors, businesses, governments and NGOs must collaborate to meet the demands of increasing numbers of older people.

The fact that demand for social care services in China has outstripped supply is a real and practical problem. There are old-age beds for only 1.8 per cent of the population in China, compared with 5 to 7 per cent in developed countries, and 2 to 3 per cent in developing countries.

Besides, the elder-care sector does not traditionally attract private capital because it needs long-term investment and faces many restrictions, which result in a low rate of return.

But this might be changing. The Chinese government appears ready to relax some restrictions to encourage private-sector participation. For example, in the city of Hangzhou, non-government institutions accounted for about 20 per cent of the 33,000 beds for the elderly. Such collaboration enables China to develop the “silver industry” quickly, making such care more accessible to more elderly people in a shorter time.

In developing the elder-care industry, key components include care as well as social and recreational services. In Singapore, we encourage active ageing, care in the community and active citizenry to support our elders. Singapore also has experience in providing healthcare services through an integrated value chain of general hospitals, specialist clinics, community healthcare centres and primary care clinic networks.

In partnership with ancillary service providers, Singapore is able to offer global clients comprehensive solutions such as healthcare training, healthcare info-management, consultancy, facility design, operations and management.

Some Singapore players like China Healthcare, Healthway Medical and Q&M have made headway in China. IE Singapore is helping more of our healthcare service providers explore the market. Such partnerships contribute towards social development, and are in line with Chinese local governments’ vision to create a more inclusive society.

Hope for China

China’s demographic problem will continue to pose a big domestic challenge in the short to medium term. But recent indications show that the country is bringing things under control. From Guangdong province to Suzhou city, China has started developing better social infrastructure, and building a “happy” citizenry in its provinces and cities. There is a good chance that as China continues on this path, the country will succeed in mitigating its ageing problem in due course.

China’s ageing population issue will be part of the panel discussion “From demographic dividend to demographic crisis?” at the FutureChina Global Forum

The author is assistant chief executive officer, International Enterprise (IE) Singapore. Based in Beijing, he oversees the agency’s strategy and operations for China and the Middle East & Africa.
For more on IE Singapore’s view of China’s growth, visit www.iesingapore.com/insights