‘Gray hair economy’ develops in China

Every Wednesday, Ms. Zhang Zhili spends an hour riding the bus to class to play African drums. At age 71, Ms. Zhang found joy and new friends at a school for the elderly in Beijing.

In addition to drumming classes, this former elementary school teacher also participates in social dancing, with tuition for two classes totaling 2,000 yuan (280 USD) for a semester. Seeing herself standing up straight in dance class gave her a boost of confidence. After school, she often goes out with friends. “As we get older, what is necessary? Is to love ourselves,” she said.

China is facing a rapidly aging population. Last year, about 297 million people were aged 60 and over, more than one-fifth of the population. It is forecast that by 2035, this number will exceed 400 million, equivalent to more than 30% of the total population.

Many elderly people now seek a variety of services beyond the traditional choice of going to a nursing home. This trend is fueling a boom in schools, home care services and many communities for the elderly, which Beijing calls the “Silver Economy”.

Hu Zuquan, a researcher at the State Information Center, expects the scale of this economy to increase from about 7,000 billion yuan (about 982 billion USD) currently to about 30,000 billion yuan (about 4,200 billion USD) ) by 2035, increasing its share from 6% to about 10% in the entire world’s second largest economy.

Du Peng, dean of the Department of Population and Health at Beijing’s Renmin University, said the government is expanding basic care services to all the elderly, moving beyond the traditional focus on the lonely. . Last year, officials compiled a list of basic care services that needed to be rolled out nationwide, including providing capacity assessments for people over 65 and subsidizing care training for family members. families of people with disabilities.

Filial piety is deeply ingrained in the Chinese way of life, and most elderly people prefer to live with their families after retirement, usually when they are in their 50s to 60s, one of the youngest retirement ages in the world. number of major economies in the world. Many people help care for their grandchildren and some view entering a nursing home as a form of abandonment, except in cases of severe hardship.

In January, Beijing issued new guidelines calling for expanding home care services and developing markets for fashion, food and technology products more suitable for the elderly. Educational services that help enrich retirees’ lives are also encouraged.

Mr Du Peng said home-based services provide a more affordable alternative to nursing homes, helping to reduce accommodation costs. Most elderly people in China are relatively healthy and need a richer cultural life.

Ms. Cai Guixia, 60 years old, said she found fulfillment in African drumming classes and modeling. She thought she would feel “abandoned” in a regular nursing home, so she preferred to hire a maid and go to school. Liu Xiuqin, owner of two nursing homes, saw a business opportunity in meeting those needs.

She invested more than 800,000 yuan (about 112,000 USD) to open a school in Beijing. Ms. Cai and Ms. Zhang are among 150 students participating in dancing, singing, yoga and modeling classes that cost about 1,000 yuan ($140) per semester. Outside of class, Liu organizes activities for students to interact.

However, making a profit in the “grizzly economy” is still challenging. Liu hopes to break even in another year and believes in the future of the market, as the generation born in the 1960s and later values ​​quality of life and health more than their parents. According to her, this industry requires perseverance and cannot make money quickly.

Wu Tang co-founded a school last year in Guangzhou, after his geotechnical investigation and surveying business was hit by the real estate market downturn. The school offers courses to help the elderly achieve some of their childhood dreams. The problem is that the operation is still losing money and he faces competition from budget-funded courses with cheaper tuition fees.

In Beijing, Cui Yang’s company offers home haircuts for 30 yuan ($4.20), transporting the elderly to the hospital for 50 yuan ($7) per hour, along with other services. Despite receiving subsidies from the government, including free rent, Cui is still losing money. She said the business would not be able to survive without the subsidy.

It’s not just small businesses that are having trouble. Wu Wenjing, head of the home care department of a subsidiary of state-owned financial group China Everbright Group, operating in Chongqing, said her unit has suffered continuous losses over the past 13 years, about one million people. Yuan (about 140,000 USD) per year

Ms. Wu’s business has 70 employees who work in roles such as caregivers, rehabilitation specialists and psychotherapists, often going to customers’ homes. This industry is highly competitive and has a high turnover rate due to the hard work.

She hopes to balance revenue and expenditure in the next five years and is excited about the government’s efforts to develop the elderly economy. “The spring of the elderly care industry in China has finally arrived,” she said.

Many businesses are trying to gain a share of this government-supported market. Real estate developers such as Vanke and Sino-Ocean Group and insurance companies such as Taikang Insurance Group have built high-end communities for the elderly with amenities such as movie theaters and mahjong rooms. and food service.

China is also working to tackle dementia, providing cognitive screening tests and training staff to work in memory clinics or as social workers. Several pharmaceutical and biotechnology companies are developing drugs to treat Alzheimer’s disease and other forms of dementia. Meanwhile, some vacant schools and kindergartens – a result of falling birth rates – are being converted into aged care facilities.

The government’s efforts to support the senior economy are paying off. According to official data, by June this year, the country had 410,000 care facilities, double the number in 2019.

However, questions remain about the spending power of many older Chinese people. A 2021 nationwide survey jointly conducted by the Ministry of Civil Affairs found that older adults have an average annual income of 11,400 yuan ($1,574. In rural areas, the figure is less than half that.

According to data from surveys conducted by Peking University, more than one in 10 older Chinese people are living in poverty. The low point in the living standards of the elderly is in rural areas and western China.

Gary Ng, senior economist at Natixis Corporate and Investment Banking, said that China’s “gray-haired economy” is still in its infancy. According to him, if the elderly do not have enough insurance to cover medical and other expenses, they have to spend money on these issues, limiting their ability to spend on products and services. such as shopping, studying or entertainment.

According to him, Beijing needs to continue to provide tax incentives and invest in training a skilled workforce for this economy. “There’s a lot of promise here, but it seems like there’s still a lot of work that needs to be done,” he said.