An aging population is a heavy load for the government, but it offers opportunities for companies.
By the end of 2014, 15.5 percent of China’s population was over 60 years old. The ratio will rise to 38.6 percent by 2050.
The structural change prompted the country to step up industrial transformation, ease its family planning policy and delay the retirement age.
This is the first year that married couples are allowed to have up to two children, and many Chinese regard the Year of the Monkey as favorable.
The number of newborn babies is expected to increase significantly, but we still need to wait for years before the new generation grow up to add to the workforce.
As such, delaying the retirement age has become a natural choice.
Such a move will keep more people in the labor market while reducing the amount of payable pension funds.
The balance sheet of pension funds in most Chinese provinces is in red. Such a situation cannot last long.
However, increasing government spending on the elderly will bring huge opportunities to enterprises.
Elderly home operators, medical and healthcare providers as well as tourism and entertainment businesses all stand to benefit from the focus on the elderly.
Investors may consider Jiangsu Phoenix Property Investment Co. Ltd. (600716.CN), which has been exploring an “elderly real estate + health business” model by investing in hospitals, real estate for the elderly, and related businesses.
Investors should also note that the elderly have much more time than the youth to travel and they prefer tours more than the youngsters do.
China International Travel Service Corp.（601888.CN), which is to be merged with China Travel International Investment Hong Kong Ltd.（00308.HK), will have a bright outlook as it is the country’s biggest state-backed travel service company.
As for healthcare, many Chinese, especially the elderly, believe in traditional Chinese medicine. This is why Chinese medicine maker Beijing Tongrentang Co. Ltd.（600085.CN) is likely to gain.
Where there are social issues, there’s business. Entrepreneurs should be watching carefully and seize the opportunities.
This article appeared in the Hong Kong Economic Journal on March 4.
Translation by Myssie You
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