After a surge in fertility rate and population in the early 60’s, China has enacted various measures to control births since 1963, culminating in the well-known “One-Child” policy in 1978. Fertility rate has since dropped from over 6 births per woman in 1965 to 1.6 births currently. The issue of an ageing population is especially acute as China is “getting old before it gets rich” because its GDP per capita still significantly lags other ageing developed countries.
To cope with this, the government has reformed the pension systems to better support the rise of an aging population. The prospects of an enlarging elderly population, increasing consumer affluence and longer life all lead to ample investment opportunities. Sectors that will benefit from this trend include housing, healthcare, health food and financial products.
Senior housing is the biggest expenditure of the elderly. But contrary to common belief, there are no shortage of beds or space for the elderly in China. What is in shortage are good operators that provide high quality services to the elderly. Healthcare is the second largest component of elderly spending. Going forward, chronic care such as eye-care and hearing aids would be increasingly elderly centric. As consumers become increasingly health consciousness, investors can also tap on opportunities in the nutrition supplements sector. Increasing wealth, stronger purchasing power, coupled with the public pension funding gap will also create new demand for life insurance and wealth management products.
Download the Elder care report in China here.