Global Investors Cash in on China’s Nursing Home Boom

With China’s population aging rapidly, there’s been an increasing need for elder care that has sparked a nursing home boom, reports China Daily, and foreign investors are looking to get a piece of the market.

In 30 years’ time, China’s 60+ demographic will account for more than 30% of the overall population, up from the current 13%, according to the National Bureau of Statistics. This leaves China with “the biggest aging-society problem of any country in the world, exacerbated largely by its one-child policy,” says China Daily.

With the demand rising exponentially, foreign investors have stepped into supply roles, seeing an opportunity to move into “an increasingly lucrative and relatively untapped market,” the article says.

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Currently, the level of demand is posing a challenge to the Chinese government.

“Services for the elderly are too weak to handle the situation and the welfare system is still backward and a large number of senior citizens in rural areas are not included,” China Daily cites Wu Yushao, deputy director of the Office of China National committee on Aging, as saying.

With the majority of nursing homes in rural China funded and often operated—but not well—by local governments, the country has looked to private and foreign investors to “help cover the shortfall in facilities for care of the elderly,” and “private companies dominate the nursing home sector in most major cities,” says the article.

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There’s still “potential for enormous growth,” foreign investors believe.

“I expect the level of inquiry (from investors and developers) will continue to increase rapidly over the next five years,” the article quotes David Lane of ThomsonAdsett & Partners Pty Ltd, an Australian consulting company that’s been involved in the Asian health care sector since the 1990s, as saying.

However, investors will have to battle Chinese tradition of children taking care of their parents, China Daily says, and they’ll need to familiarize the concept of nursing homes. Additionally, affordability may be an issue for many middle- to low-income seniors.

While government oversight of nursing homes remains minimal due to the lack of a formalized regulatory structure, many in the industry believe the sector will continue to boom as the elderly population surges and the country looks for ways to care for it.

Read the full article here.

Written by Alyssa Gerace