For the first time in years, China has seen a withdrawal from the workforce rather than the other way around. With an aging population, health care is becoming a top priority for both the powers that be and the individual in China.
Despite the recent minute drop in the GDP growth rate in China, the rising superpower can still boast while growing at a healthy 7.5% in Q2 2013. However, even a country that’s averaged about 10% growth for the past 30 years can have some issues. In the next few years, the inevitability and sheer scale of the aging population could dominate the concerns of the governing body.
Currently, about 7% of Chinese citizens are 65 or older. By 2020, that figure will be more than tripled with a staggering 23% of China at the age of 65 or older. For a long while now, China has enjoyed have a relatively large workforce to support its elderly population. Although, for the first time in a long while the trend seems to be moving in the other direction. In January of 2013, the workforce in China shrank by 3.45 million individuals. And, according to Global Demographics, in the next decade the number of people aged 15-24 will diminish by 21%. Not exactly an ideal combination of figures to support a consistent labor force.
So, how will this impact the health care industry in China? There are many figures predicting how much the government will increase spending by, but it’s all speculation at the end of the day. China as a country will most likely increase its total output on health care, but it’s impossible to determine by how much exactly. However, what health insurance companies should be aware of is the growing market of elderly Chinese nationals with a higher standard of living relative to today’s pensioners. As income rises, individuals will have greater access to lifestyle related products in their older ages. It’s probably that there will be significant demand for goods such as canes, eyeglasses, hearing aids, wheelchairs etc. Additionally, present day assisted living in China is struggling to keep up with about three available beds for every 100 senior citizens. As post-industrialism sets in and children flock to large metropolitan areas away from their parents, the demand for assisted living services could grow significantly.
It’s difficult to point to some of the financial speculation surrounding this issue of an aging population and form a definitive opinion. However, one can confidently say that growth in the aging population is coming. It’s our opinion that with it will come incredibly interesting economic and social changes as the country