China has entered an aging society, with the official acknowledgment of an unprecedented crisis in the social security fund. Observers believe that due to long-term neglect of livelihood issues by the Chinese Communist Party, coupled with economic downturns and social moral decay, China’s elderly care is facing a huge crisis.
On August 19th, Ding Xuedong, the secretary of the National Social Security Fund Party Committee, published an article on the official website admitting that China currently “has entered a moderately aged society, and is expected to enter a heavily aged stage around 2035, which will continue for quite a long time,” and that the “urgency and difficulty of the strategic reserve fund have never been seen before.”
Data released by the National Bureau of Statistics of China shows that by the end of 2023, the population of people aged 60 and above in China had approached nearly 300 million, with a large base of elderly population and a rapidly aging rate.
Experts predict that this number will exceed 400 million around 2035.
For the silver-haired industry with hundreds of millions of elderly people, the outlook is not optimistic. “Because people don’t have money. Few people choose to live in nursing homes; it costs a couple thousand, and it’s even more expensive for those who need full-time care,” a doctor shared with a reporter of Dajiyuan.
In some cities in Shandong Province, there have been several nursing homes established in recent years. Some elderly people who require living care or cannot take care of themselves choose to reside in nursing homes, which can cost over 3,000 yuan.
In rural areas in North China, an empty-nest elderly couple lives in a dilapidated village. In their seventies, the grandfather used to work in construction nearby, but as he gradually became unable to work, they started renting out their land. With a monthly pension of one to two hundred yuan, they rely on their children working elsewhere for financial support. The new rural cooperative medical insurance scheme in their county only covers 45%, and a few years ago, when the grandfather’s sister suffered a stroke, she was brought back home to wait for death.
Volunteer Wang Li, who cares for war veterans, told Dajiyuan that she has been engaged in volunteer activities for over ten years after retirement and has learned that China’s nursing homes are divided into three categories. The first category includes high-end private nursing homes where fees range from ten to twenty thousand yuan per month, making them only accessible to some artists and wealthy individuals. Although the facilities are good, interactions are cold, and residents feel proud and distant from each other.
The second category consists of mid-range private nursing homes approved by the state. In big cities, the fees usually range from five to eight thousand yuan. In rural areas like Shandong, nursing home fees are between three to four thousand yuan. Triple rooms cost three thousand, double rooms cost four thousand, with fees set based on local wage levels.
The third category includes those funded by the civil affairs department, where some elderly people can stay for free, but due to limited resources, they may have to wait for years. Lower-tier nursing homes have significantly poorer conditions, with a fee of three thousand being considered the best in rural areas.
“Wang Li said that the money allocated by the government gets deducted here and there, and by the time it reaches the nursing home staff and finally the elderly, there’s not much left for them to sustain themselves. Volunteers have seen cases of elderly veterans being mistreated by caregivers as they have no family and children present. Some elders have been neglected even after passing away, with the nursing home covering up the deaths for financial gain.”
Wang Li pointed out that the retirement pensions of corporate workers and government employees differ significantly, leading to criticism of the pension system. Retired workers in cities often express grievances. Foreign companies pay the highest amount into the pension system, compliant with national regulations. State-owned enterprises manipulate policies, contributing the minimum, which they still find hard to afford.
“Mid-range nursing homes charge six to eight thousand yuan. I won’t be able to afford a nursing home when I’m old, the money is just not enough. Unless my children are willing to subsidize, I won’t be able to afford it at all,” she said.
The Communist government has continually reneged on its promises regarding elderly care, from the 1980s slogan of “have one child, the government will take care of your old age,” to the 2000 assertion that “the government cannot be relied on for retirement,” and later in 2012, advocating for “postponing retirement and being responsible for your own old age.”
In 2023, the Social Work Committee of the Beijing Municipal Civil Affairs Bureau stated, “Over 99% of the elderly in the city choose to age at home, with less than 1% opting for institutional care.”
Wang Li believes that while elderly Chinese still prefer to live with their children, aging has indeed become a challenge. There have been instances of “abandoned children villages” in the birthplace of Confucius and Mencius in Shandong, where elders, abandoned by their offspring, attempt to take care of each other by residing in small shacks. Cases of elderly suicides by consuming poison because neglect from their children is common in rural areas, with such incidents reported by the media.
She emphasized, “Nowadays, every elderly person is likely to walk this path eventually. Having money doesn’t help if there’s no one to care for you. Even with a lot of money, can it turn into food? Don’t you still need someone to take care of you? You can’t even afford to live in a nursing home; hiring a maid in Shanghai costs five to six thousand yuan. It’s impossible without enough money to hire help.”
With the elderly situations where the older generation relies on a single child for support, Wang Li noted that China’s aging issue is extremely serious.
According to the China Social Science Academy’s “Chinese Pension Actuarial Report 2019-2050,” the pension funds will not be able to cover expenses by 2028 and will be depleted by 2035.
In May last year, the Central People’s Government of the Communist Party of China issued the “Opinions on Promoting the Construction of the Basic Pension Service System,” urging each province to implement a basic pension service system based on its economic and financial capacity.
Several years ago, the State Council of the Communist Party of China had already emphasized the need to improve the pension system. However, China’s pension-to-GDP ratio stands at about 10%, much lower than that of other countries. Hence, why does the Chinese Communist Party refuse to prioritize investing in the elderly and establish a service industry for the 400 million aging population? Are Communist officials unaware of the challenges faced by the elderly?
During an interview with Dajiyuan, Professor Feng Chongyi from the University of Technology Sydney expressed that since its establishment, the CCP has maintained low wages, minimal benefits, and increased taxation. While advocating for common prosperity, their propaganda indicates the idea of regulating welfare. Nevertheless, after the “reform and opening up,” the responsibility has been shifted to individuals, as the financial support aims at evading responsibilities, ultimately deceiving the public.
“Most of their funds are spent on national defense, stability maintenance, and industrial infrastructure construction. Not only for elderly care, but also for healthcare, education, the proportion allocated is minimal in terms of the GDP. It ranks very low on a global scale,” he explained.
Ding Xuedong’s article mentioned that “since the establishment of the National Social Security Fund 24 years ago, the annual investment returns of the social security fund have exceeded 7%,” aiming to “expand and strengthen” the social security fund, by intensifying investments in the domestic capital market, and increasing investment in technological innovation, and new productive forces.
Professor Feng Chongyi pointed out that while the social security fund is considerable, the current investment return rates in China are diminished due to the overall decline in industries like real estate. Even property developers and private enterprises are not allowed to invest due to restrictions on loans. This dynamic directly leads to the shrinkage of the pension fund.
He stated, “Coupled with changes in the population structure, China is aging before it becomes rich, resulting in an accelerated aging population and a more significant burden on the already strained pension fund.”
“These factors have put the system in a crisis state. Some economists have stated the truth that in a few years, the entire pension fund will go bankrupt, which is a severe situation,” he added.
As early as 2016, the Heilongjiang pension insurance fund had already depleted its accumulated balance, making it unsustainable. According to data from the Ministry of Finance of the Communist Party of China, out of the 31 provincial-level administrative regions in China, 11 had deficits in their pension budgets.
Professor Feng Chongyi analyzed that the financial situation of local governments has been in deficit for a long time. Especially since Xi Jinping took office and initiated the “Belt and Road” strategy, and various infrastructure investments led to many unfinished projects, alongside excessive spending abroad, resulting in an empty treasury. Therefore, both local and central governments lack the capacity to fill this gap.
He said, “Around the world, discussions are ongoing regarding how China can overcome its economic crisis. They suggest stimulating consumption, and investing in elderly care, issuing benefits to the elderly, as this would stimulate consumption. However, this goes against the current policy of the Communist Party because its industrial capacity aims to dominate markets worldwide and focus on developing high-tech industries.”
Professor Feng Chongyi pointed out that as the CCP aims to become a dominant power internationally, investing in priority sectors such as electric vehicles, solar panels, lithium batteries, takes precedence over elderly care. Now facing financial difficulties, the elderly care crisis is a consequence of long-term neglect by the CCP.