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As China"s population gets older, care for the elderly has not only become a national priority but also a big business opportunity. The size and purchasing power of the country"s aging population has prompted some high-quality healthcare service providers from Australia to enter this fast-growing segment.

Analysts expect China"s demand for healthcare and services for the elderly to grow significantly over the next decade. It is driven by the needs of a rapidly growing population, an aging demographic, new health challenges and government policy reforms.

According to the Australian Trade and Investment Commission (Austrade), by 2020 China"s population is expected to hit 1.4 billion of which 248 million will be aged 60 and above.

Many people will require accommodation in facilities that support their medical needs and lifestyles, as well as a qualified workforce to care for them — both of which are in short supply.

The growing middle class also demands high-quality services, which puts more pressure on a medical system that grapples with new health issues such as cancer, heart disease, obesity and mental health.

The Chinese government embarked on an ambitious program to transform the country"s health and aged-care industry in its 13th Five-Year Plan (2016-20) in March 2016.

Under the program, it is accelerating reform across the industry, including integrating healthcare and services for the elderly, introducing policies to attract private capital from domestic and overseas investors, and encouraging the adoption of smart healthcare.

There is a strong focus on developing the elderly-care sector, with the government aiming to provide 35 to 40 care beds per thousand older citizens, and a workforce of 10 million aged-care workers, by 2020, according to Austrade.

Australian elderly-care providers are moving into China, encouraged by the size and demographics of the aging population and the growing middle class" ability to afford aged care for their parents and themselves in the future.

It has been estimated that the market is worth A$787 billion ($595 billion) and could grow to A$2.5 trillion by 2030, according to the China Aged Care Industry Report 2016-2020, published by Reportlinker, a market research company.

Staff training

China has opened the sector to foreign investors, with several Australian providers already involved in developing elderly-care facilities and training for medical staff and technicians.

South Australian aged-care providers Eldercare, Southern Cross Care and Life Care last year formed a joint venture, Australian Ageing and Wellness Services, to provide services in China.

AAWS last December signed the first 12-month contract to deliver coaching and development services to a new provider, Traditional Chinese Medicine Hospital in Yantai, East China"s Shandong province.

Already five Australian-trained bilingual registered nurses have gone to Yantai to support local nurses.

Last year, Melbourne-based Sapphire International teamed up with Sungin, a subsidiary company of China"s Fosun Group, to develop an elderly-care center, Fragrant Hill Mansion, for the high-end segment in Beijing. It is due to open in July.

Established in 2003, the company — with 33 facilities around Melbourne — ventured into China after several Chinese companies asked to see "how we did things", said Carol Allen, CEO of Sapphire International.

"Some even wanted to buy us," she told China Daily. "With so much interest from China in the sector, we started to do some research and found there was a lack of residential aged care. Traditionally the family looked after the elderly, but that is starting to change in today"s China."

Hence, in Allen"s view, the question that providers of elderly care services face, "especially those of us entering the market from the outside", is how to make the transition as "children are moving away from their towns and villages to make a new life in the cities and overseas".

"Obviously the biggest impact of this transition is in the poorer regions, but those joining the middle class … find themselves unable to look after elderly parents," she added.

Allen estimates there will be more than 400 million people aged over 65 in the next 30 years in China.

She said health services are a key element of the China-Australia Free Trade Agreement.

"By forming a joint venture with a respected company in China, we have been able to bridge the cultural barrier and adapt our model to the China situation."

Lendlease, Australia"s largest owner, operator and developer of senior living communities, recently signed a 50-year land usage contract with the Qingpu district government of Shanghai to develop and operate a "senior living community" in China.

Located in Zhujiajiao, a heritage water town within the Qingpu district, the development will offer Shanghai seniors an opportunity to lead a vibrant life.

"With nearly one-third of Shanghai"s population aged 60 or over as at the end of 2017, there is a very large and growing demand for senior living communities," the developer noted.

This is Lendlease"s first senior living development in China and will provide 900 new independent living units surrounded by recreation areas, health and well-being facilities, and a community clubhouse.

The expected value of the development is 1.9 billion yuan ($297 million).


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