Economic Watch: China steps up policy support for silver economy

Source: Xinhua| 2019-05-31 18:24:09|Editor: Yamei
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BEIJING, May 31 (Xinhua) -- As China faces a huge challenge in caring for its increasing aging population, the government is ratcheting up policy support to the underdeveloped elderly service industry, hoping the rise of the silver economy will help boost employment and stimulate consumption.

The State Council executive meeting on Wednesday decided to increase the supply of community-based elderly care services, expand market access and guide social forces to widely participate, provide fiscal subsidies for personnel training, and optimize the fiscal expenditure structure in the industry.

Starting from June 1 this year to the end of 2025, earnings of community-based elderly care providers will be exempt from value-added tax, and enjoy a 10-percent deduction in taxable income.

"Community-based elderly care will be the main battlefield for China's elderly service system in a long time to come," said Guan Bo, an analyst with the Academy of Macro-economic Research under the National Development and Reform Commission.

The latest policy came on the heels of a regulation released by the State Council General Office last month, which stressed the need to establish a supervision system for elderly care services, deepen reform of public-funded elderly care organs, and improve the precise investment by the government.

Reforming the current elderly care service system is an urgent task for the Chinese government as it struggles to cope with pressures from an aging population.

Official data showed as of the end of 2018, China had a population of 249 million aged 60 or above, accounting for 17.9 percent of the total.

In east China's Shandong Province, the number of people over 60 accounted for 22 percent of its population and is expanding by 1 million per year.

While China had 163,800 elderly care institutions and facilities offering 7.46 million beds for senior citizens by the end of 2018, such services are far from enough to meet the diverse needs of the elderly, which means huge market potential is untapped.

According to data from iMedia Research, the market scale of China's silver economy exceeded 3.7 trillion yuan (about 536.3 billion U.S. dollars) last year and will reach 5.7 trillion yuan by 2021.

But in spite of the market potential and supporting policies, the industry still faces multiple obstacles including lack of effective demand due to high charges, low profitability and financing difficulties.

"A decent nursing home costs over 2,000 yuan per month and I would rather live at home than live in a poor nursing center," said retired worker Yang Jieming, a 77-year-old man from Shandong Province with a pension of less than 3,000 yuan per month.

That is why the government is pinning hopes on community-based services and cutting taxes on service providers.

"The tax break policies will help reduce finance burdens on service providers...while guiding and encouraging the input of more social capital to expand market supply," Guan said.

Apart from the traditional channels, China is also seeking innovative practices, including the "Internet plus nursing program," to offer diverse services to the elderly.

Under the program, approved medical institutions can send nurses who have at least five years of clinical nursing experience to communities or homes to serve patients who are too old or restricted to move.