Aging nation means challenges, opportunities

"I think China should boost solutions for elderly care as one of the country's fundamental policies. This is not an exaggeration," Li Wei said.

The biggest challenge for China is that the country is getting older before getting rich, said Li Wei.

He noted that China's per capita GDP, which reflects the well being of the population, was a little more than $1,000 in 2001, when the country started to get older, and a little more than $6,000 in 2012. Per capita GDP in developed economies ranged from $5,000 to $10,000 when they started to get older.

"The impact of the aging population on economic and social development started to be seen in the past two years," said Wang Yiming, executive vice-president of the Academy of Macroeconomic Research of the National Development and Reform Commission.

Wang noted that China's labor force, aged from 15 to 59, decreased 3.45 million in 2012 from a year earlier, which was a "turning point".

"As expenditure with pensions keeps climbing, China's savings rate will decline, and this will lead to a decrease of the investment rate. This will slow down the economic growth pace and reduce the growth potential and even have an overall effect on the economic landscape," Wang said.

Additionally, the aging process is very unbalanced in different regions as well as between rural and urban areas, Li Wei said.

"The aging process is going from the well-developed eastern regions to the less-developed western regions. Shanghai entered the aging society as early as 1979, while the northwestern Ningxia Hui autonomous region started to enter the aging society in 2012," he said.

"As a huge number of young workers moved into cities, aging is being much more felt in the rural areas than in urban areas. Meanwhile, strict family planning policies, accelerated industrialization and urbanization are also responsible for the country's reduced fertility rate, dwindling senior support services as well as the increase in the number of disabled elderly and elderly with no children around them," Li Wei said.

The number of senior citizens who live alone or whose children are not around are estimated at 62 million, more than one-third of the total elderly population, while the disabled elderly total 33 million, Li Wei added.

Potential ahead

However, this trend suggests a historic opportunity for the senior services industry, which has great significance for the country to expand domestic demand, increase employment and develop new consumption hot spots, said Li Liguo, Minister of Civil Affairs.

Faced with the severe challenge, China needs to build a multi-tier elderly support system, said Gu Shengzu, vice-chairman of the NPC Financial and Economic Committee.

"We must boost the aging service industries, as pensions alone are insufficient for elderly support. The government provides basic services with a support mechanism, while families play a fundamental role thanks to our traditional filial culture. Institutions and other businesses in the aging service industry should also play their roles," Gu said.

"In addition to perfecting the system of aging services, it's important to encourage private capital to get into the business," he added.

In October 2013, CITIC Trust Co Ltd launched China's first fund for the healthcare industry. The fund aims to benefit investors through the Jialize International Health and Wellness Center in Kunming, Yunnan province, joining hands with well-developed organizations from France and the United Kingdom. The initial size of the fund is about 1 billion yuan ($164.2 million), and the total size will exceed 10 billion yuan, said Li Feng, deputy general manager of CITIC Trust.

"The draft for reverse mortgages, or house-for-pension programs, will be finished in December and will be launched in January. Reverse mortgages allow the elderly to receive money from insurance institutions against the value of their houses while they can continue to stay in the houses. This will create a new system of elderly support and greatly unleash the purchasing power of the elderly," said Meng Xiaosu, chairman of China Real Estate Development (Group) and chairman of the supervisory commission of Sing For Life Insurance Co.

He added the insurance product is suitable for Chinese seniors with more than one house.

"We should actively explore new employment areas, including developing projects suitable for the elderly. We shouldn't see aging as a 'silver tide' challenging the current economic and social structure. Instead, we should transform it into a 'silver bonus' boosting social and economic development," said Hu at the Ministry of Human Resources and Social Security.

He added that so long as China maintains political stability, increases the wealth of the nation and makes full use of different resources, the country will not only support the increasing number of senior citizens but also improve their lives and those of younger people.