Country to open market for elderly care

China Daily 2016-12-24

Businesses that serve the needs of the elderly in China are in the spotlight again as the central government announced on Dec 23 that it will “fully open up” the market by 2020 and invite more foreign investors into the nonprofit service sector.

Calling elderly care a “sunrise industry”, the State Council’s General Office in a 6,000-word circular laid out plans to improve services for China’s fast-expanding group of elderly citizens. They include lowering the entry threshold by simplifying registration procedures for all elderly care institutions, building a market pricing mechanism and a credit system for the sector and using internet tools to put services near at hand.

Since 2013, China has officially opened its arms to overseas investors to create for-profit eldercare businesses. This time, the central government is offering to lift restrictions for them to take part in the nonprofit sector, promising rights and benefits equal to those of their Chinese counterparts.

The detailed policy for foreign and domestic investors has been submitted to the State Council’s Legislative Affairs Office for further review and approval, according to the Ministry of Civil Affairs. The policy is expected to be finished by the end of the year, as directed.

At present, nonprofit providers of care for the elderly in China can get various government subsidies.

For instance, in Hebei province, the government will offer 4,000 yuan for each bed and 100 yuan ($14.4) for each customer the provider takes in, in addition to lower land costs and taxes, according to Li Donghui, marketing director of Yanda Golden Age Health Nursing Center in Yanjiao, Hebei, a nonprofit eldercare community that currently has 2,300 beds and plans to add another 7,700 by 2018.

In Beijing, the subsidy can be up to 10 times higher.

Li said he spoke with some of his overseas counterparts at a conference in France last month, and they asked many questions about China’s eldercare market.

Gaining market share by entering the nonprofit sector and selling relevant products to seniors can be profitable, he said.

Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, the think tank of the Ministry of Commerce, said the Chinese government has recently shown interest in inviting foreign investors to inject money into certain lagging industries, including care for the elderly.

“We need to wait and see if solid measures will be taken to encourage foreign investment,” Bai said.

Local governments are required to help transform public elderly service institutions into private enterprises. By 2020, nursing home beds in government-owned institutions should take up less than half the total, according to the circular.

The government is also encouraging elderly care institutions to operate as medical and health institutions. Eligible centers will be included in the basic medical insurance system.