Yichang shows a new way to tackle aging challenge


Improving the well-being of the elderly people has long been the Chinese government's focus. To do so, the government has also drawn on the experiences of other countries and foreign organizations.

The Asia Development Bank has been supporting the development of China's elderly care system. In fact, the ADB has been providing technical assistance for Hubei Yichang Comprehensive Elderly Care Demonstration Project since 2014 to help establish a sustainable eldercare system.

Operational knowledge and lessons regarding innovative financing, capacity building, integrated care have been harvested from the long-term collaboration, providing hands-on experience for building an environment friendly to the elderly in less-developed cities in developing countries.

Population aging challenges in China

As China grapples with the largest elderly population in the world, the challenges posed by population aging can no longer be ignored. More than 18.9 percent of China's population, or 267 million people, are aged 60 or above (according to the National Health Commission in 2022), with the figure likely to reach 35.0 percent by 2050 (United Nations, 2022). In fact, according to the UN, China is hurtling toward a super-aged era.

This demographic trend is straining China's healthcare system. The average monthly pension of 170 yuan (about $25) for rural and urban residents accounts for only 6.12 percent of the per capita disposable income in 2021. Even for the elderly in rural areas, the amount barely covers basic living expenses.

The macro-level outlook of the aging trend is not encouraging either. With a diminishing working-age population, the elderly-support ratio (people aged 15 to 64 to people aged 65 or above) is projected to decline drastically, from 5.5 persons to 1.9 persons by 2050, meaning fewer than two people in 2050 will provide economic support to one person aged 65 or above, according to UN estimates. The elderly in China, it seems, are heading toward an increasingly vulnerable situation.

Major challenges in eldercare include an unsustainable pension system, an imbalanced and inadequate supply of eldercare services, and the increasing number of elderly people with disability and dementia.

Insufficient capital hindering eldercare development

The first major challenge is inadequate supply of capital, which is hindering the development of the eldercare system, while the pension system has structural problems. As the principal source of pension funds, basic pensions comprise about 75 percent of pension assets. The financial sustainability of the pension system might face a severe challenge as incoming funding from salaried contributions falls short of covering the outgoing healthcare expenditure.

The second problem is the shortage of eldercare providers, which limits the provision of eldercare services. According to the Ministry of Civil Affairs, there is a significant shortage of eldercare providers, with their number meeting only about 10 percent of the market demand. High labor intensity, poor wages, and lack of social recognition are preventing people from opting for a career in eldercare.

The increasing number of elderly people with disability and/or dementia, too, poses a big challenge to the eldercare system. In 2019, about 75 percent of the elderly population in China suffered from non-communicable diseases, according to the World Health Organization. This shows that a high percentage of elderly people need integrated health and elderly care.

Facing unprecedented aging challenges, the Chinese government has implemented various policies, from labor market reform to a new private pension scheme.

In September 2022, the government announced a new private pension plan that will allow individuals to make voluntary deposits into a pension account and invest their pension money in stable financial products. And in March, the government unveiled sweeping reforms in central government institutions, including shifting of responsibility for policies and measures relating to the aging population from the National Health Commission to the Ministry of Civil Affairs.

While these policy measures reflect a commitment to improve eldercare services and financial security, significant challenges remain, as issues such as an unsustainable pension system, imbalanced and inadequate eldercare services have not been effectively addressed.

Improving the well-being of the elderly has long been of high importance to the government, which has been lauded by the international community. The ADB, in particular, has been a strong supporter of China's efforts to develop its eldercare system. Since 2014, the ADB has provided technical assistance for the Hubei Yichang Comprehensive Elderly Care Demonstration Project, contributing to the establishment of a sustainable eldercare system.

This collaboration has helped both sides gather valuable knowledge and learn important lessons in innovative financing, capacity building and integrated care, which can benefit other developing cities in building an aging-friendly society.

From a super-aged to an aging-friendly city

Yichang, a mid-level city in Hubei province, is taking bold steps to address the population aging problem. The city's elderly population was higher than the national average of 6 percent in 2020, according to Yichang local government data.

To address the issue, the Yichang local government has partnered with the ADB since 2014. With the ADB's technical assistance, the Yichang local government's proposal for a comprehensive demonstration project for the elderly was approved by the Ministry of Finance. The project combines three innovative approaches to address the city's population aging problem.

First, the project's innovative business model has helped provide sustainable financing for the eldercare market. Under the model, local private stakeholders were urged to support the development of the eldercare sector with capital and management through public-private partnerships, delivering quality services and narrowing the gap between local fiscal capacity and increasing pension expenditure.

Second, the project's comprehensive capacity-building programs have helped improve senior citizens' education and training facilities, generating additional workforce for the benefit of industries and enterprises. Education for the elderly includes on-job-training and college education, particularly in geriatric medicine.

Third, the project focuses on integrated eldercare services and medical care support in order to meet elderly people's daily and special health needs. The three-tiered eldercare services (home-, community- and institution-based) allow health workers to meet the elderly people's need for treatment of acute and chronic diseases at local or nearby medical centers or hospitals, strengthening geriatric care and improving the overall healthcare services for the elderly.

The Yichang demonstration project has already yielded many positive results. For example, the number of beds for senior citizens increased from 18,000 in 2014 to 35,520 in 2022, while the number of eldercare providing companies surged to 236, nearly three times the number in 2015.

Also, more than 100 public eldercare centers and 176 home-based eldercare facilities have launched services, and almost all of them provide eldercare and healthcare services, as well as quality care services for the elderly with disability and dementia.

Why is the Yichang story important for the world?

The efforts to improve the well-being of the elderly in Yichang have been successful thanks to many factors, including the support of the central government. Yichang was listed among the "national key contact cities," in June 2022. It has also been recognized for its impactful and active response to population aging. The city today serves as a model for developing an effective and successful eldercare system and building a senior citizen-friendly environment, which can be replicated not only in other parts of the country but also in other countries.

Yichang's success story could also help cities in other Asian countries with rapidly aging population to build an effective eldercare system. The Yichang project shows the importance of a scientific and economically sound plan to overcome seemingly insurmountable challenges so as to improve the well-being of the people, especially the elderly people.

It also shows that developing countries can leverage international best practices and engage the private sector, financial institutions and academic institutions to execute projects for the benefit of the people through systematic planning, knowledge sharing and cooperative initiatives.

Yao Yixin is a senior research fellow at the Asian Development Bank Institute.

Yue Benbo is an intern at the same institute and an undergraduate student at the Graduate School of Public Policy, the University of Tokyo.

The views don't necessarily reflect those of China Daily.