Rising number of over-60s creates challenges as low returns put off possible investors

A volunteer chats with an elderly resident at a nursing home in Beijing. Wing Zhen / for China Daily

Editor's note: Beijing's population is aging, and the city is investing in various services catering to the elderly. China Daily examines the efforts being made.

About 96 percent of elderly Chinese said they prefer home-based care to living in a nursing home, according to a recent survey by the Beijing Municipal People's Congress.

Grandpa He, 80, retired from the Beijing Shougang company and has Parkinson's disease. His wife has diabetes, and the couple are unable to look after themselves.

Although Grandpa He has four children who live in Beijing, they seldom visit him because he lives far from downtown in the city's western outskirts.

He's pension amounts to only 3,000 yuan ($490) per month, and his wife, who did not work when she was young, receives 200 yuan subsidized by the government.

Unable to afford a nursing home, they resorted to home care, run by the Leling Elderly Care Organization of Beijing.

A caregiver from the community organization visits the couple every day and helps them shower, cook meals and clean the house.

According to a survey by 21st Century Business Herald, most retirees of the Beijing Shougang company have a pension of 1,000 yuan per month.

Even if the medical reimbursement rate for retirees could reach 80 percent, life would still be hard for those people.

In He's case, he would have to pay at least 8,000 yuan for himself and his wife to live in a nursing home.

But it isn't a question of income. Elderly people commonly prefer a familiar environment and neighborhood, and the majority choose home-based care.

The market potential is enormous as Beijing has a rapidly growing aging population. In 2013, the capital was home to 2.77 million people aged 60 and older (with permanent residence), accounting for 21 percent of the city's population. The number is growing by more than 500 daily and will reach 3 million by the end of 2014, the Beijing government said.

The Beijing Bureau of Civil Affairs announced in 2009 its 9064 Project in which, by the year 2020, 90 percent of seniors will receive care at home, 6 percent through community-based centers and 4 percent through professional institutes.

Despite the huge demand for home care services, investment in the industry has been limited due to low profits.

"Given the low returns, it's difficult for us to recruit caregivers and nurses. The normal salary for a caregiver is 3,000 yuan, which is a low salary," said Wang Yanrui, founder of the Leling organization.

The organization lost 180,000 yuan in 2011, and its revenue from home care services was only 30,000 yuan.

Recently, things took a turn for the better as the government enhanced its support to the industry, introducing a regulation whereby the city government could buy public services from independent nonprofit organizations legally registered as an NGO.

Last year, the Leling organization successfully registered with the civil affairs department and could receive funds from the government.

Social organizations must find a government department or agency to be their supervisory body before they legally register as an NGO. However, it is usually difficult for many organizations to find agencies willing to do so, and so most of them are unable to register.

"The easing of the NGO registration policy helped the development of our organization and also reflected its backing of the industry," Wang said.

The Leling organization has also gained financial support from companies and foundations, and is expected to make ends meet this year, Wang said.

In 2010, the Beijing municipal government spent 42.77 million yuan on buying 300 public services from NGOs. By 2011, the figure reached about 80 million yuan.

In 2011, the city authorities issued guidance on buying public services, saying the target projects will mainly be social services, charity and community services.

Beijing plans to promote home care services for senior residents through drafting a specific law and nurturing a preferential market for companies to provide a visiting service for the growing silver-hair population.

In 2015, the city government will allocate 600 million yuan to services for the elderly, of which 122 million yuan will go directly to the preparation of a home care services draft and other supplementary policies, based on the city's budget.

The home care services draft for senior residents, the country's first specific regional law on this basic model for the elderly, will be reviewed by the municipal legislature in January 2015.

The draft is necessary because of the glaring problems that exist, said Yuan Fang, deputy director of the bureau heading the draft. Besides, the industry development for providing such services lacks adequate support from preferential policies and sufficient allocations.

Sun Li contributed to the story

[email protected]