Aged care and healthcare to China

Trends and opportunities

The market

China’s population is rapidly aging. The cumulative effect of decades of robust economic growth on rising life expectancy coupled with a history of strict population control policies, has resulted in a growing aging population. By 2020, China’s population is forecast to reach 1.4 billion, 248 million of whom will be aged over 60.[1] These changes to China’s demographics, in addition to existing pressures on the medical services industry has underpinned the governments plans to accelerate the development of an aged care system and promote construction of aged care facilities.

Recent national policy initiatives have sought to develop a system of services to address the escalating demands of China’s elderly population. The blueprint of this emerging system, as outlined in the thirteenth five-year plan, consists of three tiers of social services for the aged: home-based care, community-based services and institutional care. The Chinese Government has introduced policies to attract private capital from domestic and overseas investors and is encouraging the adoption of smart healthcare.

Healthy China 2030, is a national health strategy and details several government priorities for the aged care and health care sector.

These include:

  • The introduction of an integrated health care and aged care system
  • The integration of traditional Chinese Medicine in aged care services
  • Research and development into the prevention and treatment of chronic diseases
  • The development of health management services for the elderly
  • Increased awareness and prevention of dementia.

In recent years, the Chinese government has increased efforts to build residential aged care facilities and has actively promoted the construction of senior housing as part of its wider efforts to provide 35-40 beds per thousand elderly citizens, supported by a workforce of 10 million aged care workers by the year 2020.

National policy directives urging local governments to apply preferential policy treatments for private-sector development of elder care facilities, such as tax exemptions and subsidies for local companies, has further fuelled investment into the sector. As of September 2017, China was reported to have 28,000 registered aged care institutions and 7 million aged care beds. The fastest growth in China’s aged care sector has occurred in well-developed provinces and municipalities where the pressures of an ageing populations are more acute. These include municipalities and provinces such as; Shanghai, Beijing, Guangdong, Jiangsu, Zhejiang, Hunan, Hainan, Hubei, Shandong, and Sichuan, Hebei and Tianjin.

Favourable policy reforms, coupled with rising consumer demand and purchasing power, has bolstered entrepreneurial interest from abroad. Countries such as Australia, France, Japan, USA and the United Kingdom have sought to lead the way in pursuing investment opportunities in Western-style senior housing in China.

The provision of quality healthcare and aged care services requires the development of a highly skilled workforce, trained to industry standards. China’s aged care sector is largely characterised by a low-skilled nurses and casual care workers, often with little industry experience. The National Health Commission reported that only 50,000 aged care workers and 38,000 medical care workers in China had vocational qualifications.

Despite recent favourable policy developments, China’s aged care industry is still in its infancy. There remains a significant shortage in expertise and infrastructure to keep pace with demand from China’s growing middle class. For more details, please download Austrade’s guide to (The Health and Aged Care Industry in China)

Opportunities

Aged Care Services

China’s aged care sector is an emerging industry and there are a wealth of opportunities for Australian businesses. The large “care gap” between China’s aging population and the availability of aged care services has created immense challenges Australian businesses are well positioned to capitalize on their expertise to meet this need. Recent interest in Australian aged care expertise has come from:

  • state-owned enterprises
  • real estate developers
  • local aged care facilities
  • local vocational education institutions and training organizations
  • property management companies
  • hospitals, especially geriatric hospitals and rehabilitation hospitals
  • life insurance companies
  • healthcare and aged care investors and operators
  • local design institutes (as partners) to vocational educational and training institutions
  • funds that are interested in investing in aged care sector in China

Demand from these groups often focuses on Australian expertise in the following areas:

  • Consulting services on investing into aged care facilities. (i.e investment models, operation management models, operational service standards, security and safety standards, and human resource planning, training and development)
  • Architectural design services (i.e Master planning and interior design)
  • Operation and management services provided under management contracts or through the establishment of joint ventures with Chinese organisations (i.e service planning, project management, facilities and asset management.)
  • Accreditation services for residential aged care operations
  • Dementia and palliative care services Software and IT Solutions (i.e advanced software and IT solutions to support the management and operations of residential aged care facilities, including smart devices and telehealth)

Aged Care Workforce Skills Development and Training

Human resource capacity building is in urgent demand in China, fuelled by a growing population of senior citizens who require varying levels of professional care. In 2015, there were approximately 40.63 million disabled elderly citizens, accounting for 18.3% of the total elderly population; and over 40 million elderly citizens afflicted with mental disabilities [2] .

With the Chinese Government’s introduction of a nationwide policy to integrate healthcare and aged care, there is an escalated demand for highly skilled and qualified care workers. By 2020, it is estimated that China will require a workforce of 10 million to care for an elderly population of 248 million. An Austrade survey shows, by 2020, there will be an estimated shortfall of over 2 million aged care workers across the cities of Sichuan, Guangdong, Shandong, Hubei, Jiangsu, Shanghai, and Beijing. (Austrade China Aged Care Training Opportunity Mapping)

Opportunities exist for Australian business to provide expertise to aged care operators, vocational education providers and government bodies on training in the following areas:

  • tailored training courses
  • train the trainers programs
  • on-the-job training
  • specialist training programs (e.g. for nurses working in aged care sectors; dementia/palliative care)
  • Accredited training programs
  • short-term study tours and certificate programs overseas and in Australia

For more details, download Austrade’s China Aged Care Training map which highlights the unique needs and gaps across several provinces, and the opportunities for Australian organisations.

Marketing your products and services

Market Entry

The Chinese Government is introducing preferential policies to attract private investment. The industry, however, is expecting more significant changes and improvements, particularly with policies that are associated with the distribution of government subsidies, taxation and land acquisition. In addition, a shortage of human resources and low quality of service levels present opportunities for Australian companies that are looking to be involved in China’s aged care industry.

The Australia China Free Trade Agreement (ChAFTA) came into force in December 2015 and opened the door for Australian medical service suppliers to establish wholly Australian-owned hospitals in the Chinese cities of Beijing, Tianjin and Shanghai, as well as in the provinces of Jiangsu, Fujian, Guangdong and Hainan.

Additionally, China made its first ever commitment on aged care services in an FTA, allowing Australian medical service suppliers to establish wholly Australian-owned profit-making aged care institutions in China with no geographical restrictions.

Austrade China has a team of business development staff dedicated to the health care and senior living sectors. Austrade’s staff can offer Australian companies services such as:

  • research into the Chinese market
  • practical advice on market-entry strategies
  • assistance in establishing links with Chinese companies
  • opportunity identification and delivery

Austrade Aged Care Initiatives 2018-19

  • Australian Aged Training Mission to China 15-19 April 2019

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[1] Trends and predictions on China’s ageing population China National Committee of Ageing, http://www.china.com.cn/chinese/news/1134589.htm
[2] 2016 China Health and Aged Care Development Report, China Health & Senior Care Industry Alliance

Contact details

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