In the history of China there has been perhaps no greater influence on society, no more customary standard of virtue, than a love and reverence for one’s parents and elders. Confucius is said to have told his students that “our bodies—to every hair and bit of skin—are received by us from our parents.” For this reason, if no other, dutiful children must attend to their parents’ wellbeing in old age.
As is the case in most countries, people are living longer in China. But momentous demographic changes are conspiring to make it more difficult for the Chinese to look after their seniors.
China has the world’s largest elderly population. Nearly 200 million Chinese are now over 60, or more than 14 percent of the overall population. Proportionately, that is a smaller than in the United States, which has nearly 20 percent in the same age bracket. But China’s population is aging faster, thanks to a declining birth rate precipitated by a “family planning” policy introduced in 1979 that restricts most couples to one child. The fertility rate now stands at 1.6, well below the 2.1 required to sustain a growing population. It is estimated that as many as one in four Chinese will be above 65 by 2050—probably more than the entire population of the United States.
China is facing similar demographic and socioeconomic pressures as North America. In the 1950s and 60s, following the Second Sino-Japanese War and the Chinese Civil War, which devastated the country in the 1930s and 40s, China experienced its own baby boom. It was encouraged by Mao Zedong, who felt that a large population would strengthen the nation and drive industrialization.
Mao proved right in thinking that human capital would become China’s greatest economic asset. China has exploited its huge working-age population—its so-called “demographic dividend”—to industrialize with astounding rapidity and transform itself into the world’s largest manufacturing center.
In the late 1970s, however, after Mao died and many of his policies had fallen into open disrepute, the Chinese government felt that unrestrained population growth would eventually become a liability, and it put in place its infamous one-child policy.
The tapering effect of the one-child policy over the past three decades has brought with it clear but unanticipated consequences. Although it has slowed the population’s growth rate, it has also helped to turn the population’s structure on its head. Graphically, that structure now resembles something like an inverted pyramid with an overabundance of elderly and too few younger people. The number of working-age Chinese, represented by the pyramid’s mid section, previously accounting for three quarters of the population, has begun to shrink for the first time in recent history.
Beijing is experimenting with loosening the family planning policy, allowing couples to have a second child if one of them has no siblings. If it repeals the one-child policy altogether, however, as many expect it will do eventually, it would have little effect on the immediate problem. In the near term it would only help to readjust a gender imbalance that has left China with roughly 120 females for every 100 males. By 2020 this imbalance is expected to translate into 24 million more men than women of marriageable age.
Migration patterns have compounded the eldercare problem. Over the past decade, China’s flourishing industrial centers on the eastern coast have drawn hundreds of millions of workers away from their aging parents in the poorer rural areas of western China. This mass migration, engineered in part by the government to speed up the process of urbanization in order to sustain industrialization, has eroded traditional practices of familial support. Two-thirds of China’s elderly remain in the countryside. While many receive money from their children in the cities, they increasingly need more than only financial help. As they grow older, they need assistance with basic daily activities as well as companionship, which for many is currently provided by fellow seniors.
In July, China introduced an amended national law requiring the children of parents over 60 to visit them “frequently” and attend to their financial and spiritual needs. The Law of Protection of Rights and Interests of the Aged is intended prevent patent neglect and abuse of the elderly. It is part of a national campaign to raise awareness of the plight of seniors, which includes the creation of an Elderly Day that will be celebrated each autumn. While the law does not stipulate the number of required visits or penalties for violators, Chinese courts this year have heard numerous cases of elderly parents suing their adult children for neglect.
The government at all levels remains ill-prepared to cope with the burgeoning number of senior citizens. It has not fully developed a comprehensive and robust national healthcare and insurance program, which in the United States accounts for more than 10 percent of GDP. More than 90 percent of China’s elderly are now covered by health insurance, but the quality of healthcare generally remains low and out-of-pocket expenses high. The burden of caring for the elderly still falls largely on family and friends.
Despite a three-decade long economic boom, China remains a relatively poor country on a per capita basis. More that 20 percent of the generation that helped to make that boom possible now live in poverty, drawing a basic government pension equivalent to less than US$10 a month. In China these people are said to be the ones who “got old before they got rich.” Many struggle with physical or mental disabilities, and those who have lost their only child have it hardest.
Simple mathematics suggests the magnitude of the crisis. Despite the proliferating number of private independent or assisted-living homes, China estimates that there are only 21.5 beds currently available for every 1,000 elderly in the nation’s nursing homes, most run by the government. China would like to increase this to 30 beds for every 1,000 by 2015. This modest increase will not be as easy to achieve as it might seem, for the national social security fund already faces a US$2.9 trillion deficit and is expect to balloon in coming years.
Lacking the experience needed to build a viable national eldercare system, and recognizing that the undertaking could outstrip public resources by 2020, policymakers are proposing that China tackle the problem in the same way it reformed and revitalized its economy after decades of self-imposed isolation—by opening it up to foreign investment. Direct foreign investment in the eldercare market (including nursing, geriatric and insurance services) will, they think, bring invaluable management expertise and technological know-how.
The government, for its part, would offer tax incentives and land to private foreign investors. It would concentrate its own spending on providing training for eldercare professionals, administrative support and free services to lower-income seniors, especially in underdeveloped rural areas.
Private investment, however, may not be enough. Western companies so far have been only cautiously testing the waters, establishing facilities in cities like Shanghai that target the high-end market and charging up to 15,000 yuan a month, far beyond the reach of what many seniors and their families can afford. Private investment in the sector from within China seems to gravitate to real-estate development aimed simply at turning a quick profit.
China will continue to feel the increasing weight of its aging population. The most innovative approaches to caring for its seniors may not be the most viable. The country may have to find a way back to more traditional practices of familial eldercare. These will necessarily have an impact on the economy, but what China loses in productivity and growth, it will no doubt regain in social coherence.
This article was originally published in the Diplomatic Courier's November/December 2013 print edition.
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China’s Eldercare Predicament
December 17, 2013
In the history of China there has been perhaps no greater influence on society, no more customary standard of virtue, than a love and reverence for one’s parents and elders. Confucius is said to have told his students that “our bodies—to every hair and bit of skin—are received by us from our parents.” For this reason, if no other, dutiful children must attend to their parents’ wellbeing in old age.
As is the case in most countries, people are living longer in China. But momentous demographic changes are conspiring to make it more difficult for the Chinese to look after their seniors.
China has the world’s largest elderly population. Nearly 200 million Chinese are now over 60, or more than 14 percent of the overall population. Proportionately, that is a smaller than in the United States, which has nearly 20 percent in the same age bracket. But China’s population is aging faster, thanks to a declining birth rate precipitated by a “family planning” policy introduced in 1979 that restricts most couples to one child. The fertility rate now stands at 1.6, well below the 2.1 required to sustain a growing population. It is estimated that as many as one in four Chinese will be above 65 by 2050—probably more than the entire population of the United States.
China is facing similar demographic and socioeconomic pressures as North America. In the 1950s and 60s, following the Second Sino-Japanese War and the Chinese Civil War, which devastated the country in the 1930s and 40s, China experienced its own baby boom. It was encouraged by Mao Zedong, who felt that a large population would strengthen the nation and drive industrialization.
Mao proved right in thinking that human capital would become China’s greatest economic asset. China has exploited its huge working-age population—its so-called “demographic dividend”—to industrialize with astounding rapidity and transform itself into the world’s largest manufacturing center.
In the late 1970s, however, after Mao died and many of his policies had fallen into open disrepute, the Chinese government felt that unrestrained population growth would eventually become a liability, and it put in place its infamous one-child policy.
The tapering effect of the one-child policy over the past three decades has brought with it clear but unanticipated consequences. Although it has slowed the population’s growth rate, it has also helped to turn the population’s structure on its head. Graphically, that structure now resembles something like an inverted pyramid with an overabundance of elderly and too few younger people. The number of working-age Chinese, represented by the pyramid’s mid section, previously accounting for three quarters of the population, has begun to shrink for the first time in recent history.
Beijing is experimenting with loosening the family planning policy, allowing couples to have a second child if one of them has no siblings. If it repeals the one-child policy altogether, however, as many expect it will do eventually, it would have little effect on the immediate problem. In the near term it would only help to readjust a gender imbalance that has left China with roughly 120 females for every 100 males. By 2020 this imbalance is expected to translate into 24 million more men than women of marriageable age.
Migration patterns have compounded the eldercare problem. Over the past decade, China’s flourishing industrial centers on the eastern coast have drawn hundreds of millions of workers away from their aging parents in the poorer rural areas of western China. This mass migration, engineered in part by the government to speed up the process of urbanization in order to sustain industrialization, has eroded traditional practices of familial support. Two-thirds of China’s elderly remain in the countryside. While many receive money from their children in the cities, they increasingly need more than only financial help. As they grow older, they need assistance with basic daily activities as well as companionship, which for many is currently provided by fellow seniors.
In July, China introduced an amended national law requiring the children of parents over 60 to visit them “frequently” and attend to their financial and spiritual needs. The Law of Protection of Rights and Interests of the Aged is intended prevent patent neglect and abuse of the elderly. It is part of a national campaign to raise awareness of the plight of seniors, which includes the creation of an Elderly Day that will be celebrated each autumn. While the law does not stipulate the number of required visits or penalties for violators, Chinese courts this year have heard numerous cases of elderly parents suing their adult children for neglect.
The government at all levels remains ill-prepared to cope with the burgeoning number of senior citizens. It has not fully developed a comprehensive and robust national healthcare and insurance program, which in the United States accounts for more than 10 percent of GDP. More than 90 percent of China’s elderly are now covered by health insurance, but the quality of healthcare generally remains low and out-of-pocket expenses high. The burden of caring for the elderly still falls largely on family and friends.
Despite a three-decade long economic boom, China remains a relatively poor country on a per capita basis. More that 20 percent of the generation that helped to make that boom possible now live in poverty, drawing a basic government pension equivalent to less than US$10 a month. In China these people are said to be the ones who “got old before they got rich.” Many struggle with physical or mental disabilities, and those who have lost their only child have it hardest.
Simple mathematics suggests the magnitude of the crisis. Despite the proliferating number of private independent or assisted-living homes, China estimates that there are only 21.5 beds currently available for every 1,000 elderly in the nation’s nursing homes, most run by the government. China would like to increase this to 30 beds for every 1,000 by 2015. This modest increase will not be as easy to achieve as it might seem, for the national social security fund already faces a US$2.9 trillion deficit and is expect to balloon in coming years.
Lacking the experience needed to build a viable national eldercare system, and recognizing that the undertaking could outstrip public resources by 2020, policymakers are proposing that China tackle the problem in the same way it reformed and revitalized its economy after decades of self-imposed isolation—by opening it up to foreign investment. Direct foreign investment in the eldercare market (including nursing, geriatric and insurance services) will, they think, bring invaluable management expertise and technological know-how.
The government, for its part, would offer tax incentives and land to private foreign investors. It would concentrate its own spending on providing training for eldercare professionals, administrative support and free services to lower-income seniors, especially in underdeveloped rural areas.
Private investment, however, may not be enough. Western companies so far have been only cautiously testing the waters, establishing facilities in cities like Shanghai that target the high-end market and charging up to 15,000 yuan a month, far beyond the reach of what many seniors and their families can afford. Private investment in the sector from within China seems to gravitate to real-estate development aimed simply at turning a quick profit.
China will continue to feel the increasing weight of its aging population. The most innovative approaches to caring for its seniors may not be the most viable. The country may have to find a way back to more traditional practices of familial eldercare. These will necessarily have an impact on the economy, but what China loses in productivity and growth, it will no doubt regain in social coherence.
This article was originally published in the Diplomatic Courier's November/December 2013 print edition.
