Aging society promotes the development of elderly care industry

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Editor's note: Liu Chunsheng is an associate professor at the Beijing-based Central University of Finance and Economics, and deputy dean of Blue Source Capital Research Institute. The article reflects the author's opinions, and not necessarily the views of CGTN.

According to the National Bureau of Statistics, at the end of 2017 there were 241 million people aged 60 and over, accounting for 17.3 percent of the total population. The age group is expected to reach 400 million in China by 2035.

Such a large elderly population constitutes a huge demand, and hundreds of millions of elderly people have potentially strong needs in terms of elderly care services, products and entertainment.

In this context, we should attach great importance to the development of the elderly care industry and position it as an important strategic pillar that can support the development of the national economy for a long time.

Population aging will have some fundamental impacts on China's economy and finance, such as reducing household savings, changing consumption structure, and affecting the structure of financial institutions.

Elderly people visit to a tourist attraction in Nantong, China's Jiangsu Province. / VCG Photo

More importantly, under the existing pension system in China, the pension gap continues to expand. The three-pillar pension system including a social security scheme, employer pension scheme and personal savings pension scheme has become a common practice in developed countries, which should be the direction of China's pension reform in the future.

From the perspective of pension asset management, the effective docking of pension funds and financial markets will help promote both the elderly care industry and the financial industry.

The pension finance industry can be taken as an independent part of the entire elderly care industry chain or be seen as a financial supporter of the elderly care industry.

The pension finance industry is across banks, insurance, securities, funds, trusts and real estate. Pension finance is not only an important part of the financial system, but also the key to the elderly care industry.

Two elderly people rest in a park in Zhengzhou, China's Henan Province. /VCG Photo

In addition to innovations in financial products and services that can provide support for the elderly care industry, information technology, the Internet of things, big data, VR and other technological advancements will also bring new changes to the industry.

This new business model is called smart care, which covers all aspects of home care. There are three main aspects.

It begins with health management, including online health consultation, chronic disease management and personalized care.

Based on the Internet platform, elderly care institutions are developing online consultation, appointment registration, pre-diagnosis guidance, post-diagnosis tracking, chronic disease monitoring, file management, personalized assessment, trend analysis, illness diagnosis, treatment recommendations, emergency assistance and rehabilitation services.

The platform also helps elderly care institutions provide elderly people with support services such as housekeeping, food delivery and other home care services.

Elderly care /VCG Photo

Informatization services focus on the development of wireless positioning assistance for elderly people, night monitoring, behavioral intelligence analysis, Alzheimer's disease prevention and entertainment services.

It is predicted that by 2020, the market scale of China's elderly care industry will reach 7.7 trillion yuan.

At present, the Chinese government continues to optimize the investment environment of the elderly care industry. While increasing public investment, fiscal and taxation policies, financial policies, and land policies that encourage the development have been introduced.

Many local governments have introduced more favorable policies. The enthusiasm of private capital and even overseas capital for investment in the elderly care industry has continued to rise, as well the construction of elderly care institutions and community facilities.

(If you want to contribute and have specific expertise, please contact us at opinions@cgtn.com.)