Source: Forward. The Economist
China's aging demographic is reshaping the landscape of elderly care, presenting both challenges and innovations. This article explores the dynamic shifts in China's elderly care industry.
There are two primary senior care models in China: "9064" and "9073". The "9064" model, proposed by Beijing, involves 90% of elderly individuals being assisted by socialized family care services, 6% receiving government-subsidized community care, and 4% residing in elderly care institutions.
Currently, the main senior care mode in China is "9073," with significant growth potential in "community" and "home" modes.
The "9073" model, introduced by Shanghai in the Eleventh Five-Year Plan, entails 90% of the elderly being cared for by their families, 7% enjoying community-based elderly care services, and 3% residing in institutionalized elderly care facilities.
Considering the current situation, home care may become the mainstream trend in the future, with community care and institutional care serving as important supplements. Currently, China's primary elderly care model is "9073."
Industry classification
In the Statistical Classification of the Senior Care Industry (2020) issued by the National Bureau of Statistics in February 2020, the senior care industry includes services such as senior care, medical and health services, health promotion, social participation, social security, education, training, human resources, financial services, science and technology, intelligent senior care, public administration, and manufacturing, sales, and leasing of senior citizens' products and facilities construction.
Industry chain analysis
The senior care industry chain includes upstream manufacturing of medical equipment, food, drugs, and basic products supporting senior care. The midstream focuses on senior care services such as home care, community care, and institutional care based on the "9073" model. The downstream involves the user population and marketing channels related to senior care services.
China's elder care industry: rapid development (2020-present)
China's senior care industry has experienced four developmental stages: Enlightenment I (2009-2012), Enlightenment II (2013-2015), Exploration I (2016-2015), and Exploration II (2016-2019). The year 2020 marked the beginning of a new phase in intelligent healthy aging. The "Smart Elderly" campaign, promoted by the National Office for the Elderly, concluded in 2022.
China industry overview
The Ministry of Industry and Information Technology, the Ministry of Civil Affairs, and the National Health and Wellness Commission jointly issued the Action Plan for the Development of the Smart Healthy Aging Industry (2021-2025), providing clear direction for the industry's development.
According to the seventh national census data, China's population aged 65 and above reached 13.50%, surpassing the world average of 9.3%. This aging population has led to an increased demand for senior care. The market scale of China's senior care industry reached about CNY 9.4 trillion (US$1.316 trillion) by 2022.
Diverse development modes, maturing market
The senior living real estate industry encompasses various categories, including senior living communities, community-based aging service institutions, nursing institutions, senior medical and health service institutions, off-site senior living real estate projects, urban senior living apartments, old-age housing renovations, second-hand senior living real estate, and rural senior living real estate.
The growth in China's elderly population has driven the demand for senior care, stimulating the development of senior care real estate. As of April 2023, there were 59,083 active enterprises in China engaged in senior care real estate.
Modern elderly individuals are increasingly opting for community retirement and diverse retirement real estate models, moving beyond traditional home care.
Cases of retirement real estate development models
Investment insurance companies have become significant players in the elderly care market, replacing the real estate system.
Cherish-Yearn: This model operates on a profit system with special features like a membership system, annual fees, and membership fees. The project primarily involves renting out spaces, putting pressure on cash flow. At times, other projects and apartment property rights need to be sold to manage finances.
Beijing Oriental Sun City: This model focuses on property sales, buying back property rights year by year. While this approach does not strain cash flow, it does not differ significantly from the previous model.
Taikang Insurance Group offers comprehensive one-stop services for the elderly, which is becoming an important player.
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