The Rise of Silver Economy in China as Its Population Ages

They had not heard from their father in China, an elderly retired senior lecturer, for some days. It was late winter. His wife had passed away some years before, and he now lived on his own. His son’s family became concerned. But they had migrated overseas years earlier, and other relatives in China were many hundreds of miles away.

This family predicament in China is not unusual. It is repeated the world over as societies grapple with the special needs and growing isolation of aging populations.

The Chinese government has put its Healthy China 2030 initiative at the center of its national policy development. Elderly health care figures loom large because China’s aging population is growing.

Jessica Tan, co-CEO at Ping An Group, said in a recent interview, “China has one of the largest and fastest-growing aging populations in the world. By 2030, almost 18% of China's population will be 65 or older.”

According to the United Nations, over-65s in China will make up more than a quarter of the population by 2050. There are predicted to be 366 million older Chinese adults by then, which is substantially larger than the total U.S. population today (331 million).

Furthermore, China’s population structure has changed dramatically in recent decades. The country’s economy has developed in leaps and bounds. But worker migration and rapid urbanization, coupled with the previous One Child policy, means many elderly face growing old alone with no one to support them.

While state provision of services is projected to account for the majority of elderly care services in the future, the opportunities for the private sector are immense. According to the consultancy Oliver Wyman, “With disposable income per capita expected to reach $7,000-$10,000 in the late 2020s and a simultaneously aging population, the massive middle-class and above segments in China will become the largest life insurance customer base in the world.”

This rising affluence and aging population suggests there is a vast silver economy emerging in China, in particular in elder-care financial services. Says Tan: “The entire senior care industry is expected to exceed 22 trillion yuan [$3 trillion] by 2031. So this demographic evolution raises both opportunities and challenges.”

With 225 million customers and more than 650 million internet users, Ping An has evolved lifestyle ecosystems covering car, financial, health care and smart cities services. The company has evolved its health care ecosystem to cater to the elderly.

Ping An is implementing its health care ecosystem strategy by exploiting synergies with its main financial businesses. It launched an innovative Chinese version of a managed care model, Chinese United Health, by seamlessly combining differentiated health care services with financial businesses in which the company acts as a payer, leveraging its decades of operational and management experience in insurance and health care.

ent’s home, as the elderly prefer not to go into institutions and the government expects 90% of the elderly to be cared for at home. Finally, to achieve appropriate care at home, Ping An is providing a series of remote and human butler services. It aims to answer the needs of the elderly with distant families through a combination of remote health-monitoring services to detect falls and changes in medical conditions, supplemented by a human concierge service to help with issues around the home.

In the case of the retired lecturer, eventually the local building management office was able to enter his small flat. The retired lecturer had fallen. They got him to hospital and he recovered, but it was a close call. Ping An’s elder-care service aims to address the social challenges and family concerns presented by China’s aging population, providing comprehensive elder-care service through the growing private health care sector.

This content was produced by the Wall Street Journal Custom Content, in Collaboration with Ping An Group. Click here to read the original post.