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China’s ‘Demographic Tsunami’ Begins

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Photographer: Qilai Shen/Bloomberg

Residents warm themselves in the afternoon sun at the Luofu <a href="http://www.bloomberg.com/slideshow/2012-01-05/china-battles-demographic- tsunami-.html">retirement home</a> on the outskirts of Shanghai.

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Photographer: Qilai Shen/Bloomberg

Residents warm themselves in the afternoon sun at the Luofu retirement home on the outskirts of Shanghai. Close

Residents warm themselves in the afternoon sun at the Luofu <a... Read More

Photographer: Qilai Shen/Bloomberg

A resident practices traditional Chinese calligraphy at the Cherish-Yearn retirement community on the outskirts of Shanghai. Close

A resident practices traditional Chinese calligraphy at the Cherish-Yearn retirement community on the outskirts of Shanghai.

Photographer: Qilai Shen/Bloomberg

A couple looks out from the balcony of their apartment at the Cherish-Yearn retirement community on the outskirts of Shanghai. Close

A couple looks out from the balcony of their apartment at the Cherish-Yearn retirement community on the outskirts of Shanghai.

Photographer: Qilai Shen/Bloomberg

An elderly woman looks out from behind the gates of the Luofu retirement home on the outskirts of Shanghai. Close

An elderly woman looks out from behind the gates of the Luofu retirement home on the outskirts of Shanghai.

Photographer: Qilai Shen/Bloomberg

An elderly couple walk hand in hand through the Cherish-Yearn retirement community on the outskirts of Shanghai. Close

An elderly couple walk hand in hand through the Cherish-Yearn retirement community on the outskirts of Shanghai.

Wang Fuchuan lies in bed wearing a quilted black jacket, with two comforters pulled up to his chin to keep out the chilly November air. The heating at Beijing Songtang Caring Hospice is broken and the 90-year-old’s nostrils are stuffed with toilet paper to stop them dripping.

Cockroaches scurry across the floor of his room, which has no running water or toilet. His possessions, a few articles of clothing, are in a plastic bag under his bed next to a pink wash bowl with a sliver of soap. His only entertainment is a transistor radio.

Wang counts himself lucky. While he has no family or savings, he fought against the Japanese and Kuomintang in the 1940s, so the government pays the clinic’s monthly fee of 2,000 yuan ($318). His 200-yuan pension buys food.

“A lot of people my age can’t afford to be here,” Wang says. “The food isn’t too good, but I have nothing else to complain about.”

Wang is in the vanguard of a looming demographic shift for China, Bloomberg Businessweek reports in its Jan. 9 issue. The latest government census shows 178 million Chinese were over 60 in 2009. That figure could reach 437 million -- one third of the population -- by 2050, the United Nations forecasts. While the elderly were looked after in the past by their children, urbanization and the nation’s one-child policy have eroded the tradition of family care.

“It’s a demographic tsunami,” says Joseph J. Christian, a fellow at the Asia Center at the Harvard Kennedy School, and former DLA Piper partner in Hong Kong, who specializes in senior housing issues in China. “The whole multi­generational housing model has disappeared.”

Japan’s Shadow

China’s challenge is similar to that faced by Japan in the 1990s, with one essential difference: China will grow old before it gets rich. With tens of millions of parents left to fend for themselves, the government set up a National Committee on Aging to try to devise a comprehensive strategy (CHGE7) to ensure their health and comfort.

The latest five-year plan still gives families primary responsibility for elderly care. Even so, the government is looking to the private sector, nongovernmental organizations, and local communities for a more sustainable solution. So far only a handful of companies provide service comparable to the West, and even care like the kind offered by the clinic where Wang Fuchuan lives is relatively rare.

“Elderly health care is in its infancy” in China, says Ninie Wang, founder of Beijing-based Pinetree Senior Care Services, which employs 500 nurses providing in-home support to 20,000 seniors in Beijing.

Too Few Beds

China has about 38,000 institutions serving the elderly with 2.7 million beds, enough for about 1.6 percent of the population over 60, according to the World Bank. That compares with about 8 percent in developed countries, the bank says.

Some homes are fully staffed government clinics for senior officials or private hospitals catering to the new urban elite. Most are boarding houses with few medical facilities, mainly in large cities. In towns and villages, the situation is far worse.

“If we can’t help people in Beijing, you can forget about any opportunities for helping the rural old people,” says Jing Jun, a professor of anthropology at Tsinghua University.

A 2009 survey of 140 nursing homes in the eastern city of Nanjing by a group of Chinese academics found that fewer than a third employed a doctor or a nurse. Most of the staff were unskilled rural migrant workers with minimal training.

“The goal at these homes is subsistence for residents whose children can’t take care of them,” says Zhanlian Feng, a gerontologist at Brown University who wrote a paper based on the survey in the Journal of the American Geriatrics Society. Many clinics refuse people who require full-time nursing. Others may force out residents once they become too needy, he says.

Open to Abuse

There are no industry standards and little government oversight, much like the U.S. decades ago when the system was open to abuse, Feng says. In August, the state-run China Daily newspaper carried a report about a man in Anhui province who discovered that staff at a local nursing home tied his father’s hands to his bed for 11 hours a night.

At the other end of the spectrum, the facilities and care rival many establishments in the West.

On a recent Friday at Cherish-Yearn, a complex on the outskirts of Shanghai with apartments for 1,600 seniors, silver- haired couples shuffled to the strains of “Never on Sunday” in the dance hall. In activity rooms nearby, others tried calligraphy, computer games, and traditional ink painting. Outside, there’s a miniature putting green.

Medical Facilities

It wasn’t dance classes, golf, or even the on-site financial advice that prompted Luo Zhong Bao, 78, and his wife to sell their apartment and move to Cherish-Yearn three years ago. It was the medical facilities that offered peace of mind to their four children.

“They work and have no time,” Luo says. “The hospital here is good, and they don’t have to worry about anything.”

A handful of foreign companies are jumping into the business. China Senior Care, a venture with U.S. backers, is building a 64-bed assisted-living center in Hangzhou aimed at Chinese who can afford to pay more than 30,000 yuan per month. Right at Home, an Omaha company that introduced home-care franchises to China in June, aims to open dozens of affiliates by 2017. The company charges about 100 yuan per hour of service from caregivers trained in everything from vacuuming to CPR.

No Time

“I don’t want to be a burden,” says Du Li, an 85-year-old former government accountant in Beijing with a daughter and son living in the city. While she’s fit enough to climb four flights of stairs twice a day to her three-bedroom apartment in the leafy Sanlitun district, she’s grateful for the massages and help with chores that her Right at Home caregiver offers.

“I don’t think my children have enough time,” Du says. With her caregiver, “Life is more colorful. I have a companion.”

Few of China’s growing ranks of elderly can afford those services. “International players are looking for high-net-worth clients,” says Mark Spitalnik, founder of China Senior Care. “The true problem for the government is people who don’t have money.”

China’s economic growth has given it the financial muscle to provide for the growing number of elderly and the government has been rapidly introducing pensions and health-care plans for farmers and city-dwellers, said Li Zhihong, research department director at the National Committee on Aging.

Wealth Care

“The aging of the population will be an issue in China that runs through the 21st century,” said Li in an e-mailed response to questions. “The Chinese government has all the financial capabilities and capacity to protect the basic needs of the elderly.”

Not everyone is convinced the government’s efforts will succeed. In a 20 square meter (215 square feet) apartment without heating or an indoor toilet in one of Shanghai’s few remaining old neighborhoods, 81-year-old Luo Jinxiang says his pension barely covers food and medication for his diabetes and the occasional visit to a local clinic.

“Do you really believe that the government cares for us?” he asks with a wry smile. “Don’t think about it too much. That is the way the country runs.”

--Frederik Balfour and Alfred Cang. With assistance by Natasha Khan in Hong Kong. Editors: David Rocks, Chris Power, Adam Majendie.

To contact the writer on the story: Frederik Balfour in Hong Kong at fbalfour@bloomberg.net.

To contact the editor responsible for this story: Ellen Pollock at epollock@bloomberg.net

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