Chinese insurers spot a silver lining in country’s demographic time bomb
Shanghai facility for wealthy retirees costs more than double the city’s average monthly pension
A big Chinese insurance company welcomed the first elderly residents of a sprawling, 4.3 billion yuan (HK$5 billion) residential community in Shanghai last month at a grand opening ceremony.
With estimates that China will be home to more than 300 million people aged over 60 in a decade, the Taikang Life Insurance project, able to accommodate 3,000 wealthy senior citizens, is part of a wave of Chinese insurers trying to cash in on a small but lucrative part of the country’s rapidly greying population.
There’s a growing trend of financial institutions targeting greying customers with bulging pockets
Rent and meals for a single resident living in a one-bedroom apartment cost a minimum of 6,800 yuan a month, more than double Shanghai’s average monthly pension last year.
The growing ranks of elderly Chinese, together with the country’s shrinking labour pool, have often been described as a “demographic time bomb” that could drag China into Japanese-style economic stagnation. Concerns have been expressed about China’s preparedness for such a grand demographic shift, but Beijing is well aware of the problem. Two years ago it announced plans to raise the retirement age to help keep its state pension system afloat.
But for business tycoons like Taikang chairman Chen Dongsheng, the grandson-in-law of late Communist Party chairman Mao Zedong, there is a niche market in providing good housing and care services to affluent retirees.
