CSR: Going Big on Going Gray

Friday, December 29, 2006 2:09

A rapidly aging population is among the greatest of China’s future challenges. Fortunately, companies can help deal with “getting old before getting rich”

6+1 = 1+6. It’s the reflexive property in action. It’s also a critical social byproduct of China’s long-standing One Child Policy, implemented rigorously in cities (and more or less so in rural areas) since the early 1980s. The two parents and four grandparents now focusing their doting efforts upon a single child, will in the foreseeable future become six retirees depending on that same child for support in their golden years.

Unfortunately, China need not wait for the generation now being born, the first only children of only children, to grow up. The Middle Kingdom is already rapidly becoming the gray one. Its elderly population (over age 60) has doubled from 7% to 14% in just 28 years, a progression that took twice as long in England and Germany and nearly three times as long in France. Current projections estimate approximately one retiree for each worker by 2050, requiring a social security fund that even China’s sizzling economy will be hard-pressed to support adequately. These and other worrying trends all point to what may well become among the most serious of China’s social challenges.

The effects of aging are already being strongly felt in Shanghai, China’s “oldest” city. Almost 2.7 million of its approximately 17 million citizens are over age 60, with over 750,000 “empty-nesters” living separately from their children. Shanghai’s senior citizens theoretically receive pensions of at least 750 RMB monthly, enough (again in theory) to afford nursing homes, known as Elderly Care Centers (ECC), which range from 500-1000 RMB/month.

However, Shanghai’s ECCs alone are not sufficient to deal with the scale of demand generated by the city’s senior citizens. Surveys indicate that 1/6 of Shanghai’s elderly wish to live in ECCs, yet there are less than 100,000 nursing home beds throughout the city. Aside from facilities, there is a shortage of trained medical and social workers, placing great strain on local governments charged with ensuring adequate living conditions for senior citizens.

A number of local, experimental solutions have arisen in response to these needs. Some areas are now establishing “community care centers” to extend the services of community nursing homes, with ECC staff and volunteers cooperating to provide health and

social services and affordable meals. They also serve to help alleviate the acute loneliness experienced by many senior citizens, especially “empty nesters.”

Companies operating in China are excellently positioned to help resolve the issues facing China’s communities as they grapple with the challenges of caring for the elderly. Donations can help subsidize nursing home and ECC operating costs to lighten the load for senior citizens and their families. Corporate volunteers can help ensure senior citizens receive the care they need by extending the reach of ECCs centers lacking personnel, and help improve quality of life of ECC residents and “empty nesters” alike by donating their time. Most importantly, companies can through their own example help foster the spirit of volunteerism and community collaboration needed to extend the efforts of governments and NGOs. They can also leverage their partnerships and resources to help spread implementation of effective elderly care models as they are developed.

The impacts of this demographic sea change—changing consumption patterns and shifting government priorities and expectations, among others—will be forcefully felt across society, including companies and their employees. Companies in China can help manage this change and demonstrate commitment to their communities and the families of their workers by incorporating elderly care programs into their CSR mix. Aside from displaying long-term insight into China’s needs, assisting in these programs can garner community recognition and government support, provide a positive example to other companies and help develop healthy social dynamics for China’s sustainable development.

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2 Responses to “CSR: Going Big on Going Gray”

  1. Tucson Dunn, [email protected] says:

    July 14th, 2007 at 7:49 pm

    On July 11th 2007, Beijing’s Bureau of Civil Affairs anounced that Beijing needed an additional 22,000 elder care/housing beds within the next four years. This number is further detailed by number of beds to be added by district and street committee. To support this demand, the local government will provide a one-time subsidy of 10,000 RMB per bed for new construction and 5,000 RMB per for renovation-coversion projects within the 4th Ring Road and approximately half this for projects outside the 4th Ring Road.

    Silver Age International is a Joint Venture Senior Care Management Company founded in Beijing in 2005. In addition to developing its own 1,000 unit Senior Living Retirement Community and Nursing Home in Beijing (expected to open in late 2008), the company also provides Senior Housing Development Consulting and Management Services. The company’s management team is a unique blend of China and United States experts in the field of elderly care.

  2. Rich says:

    July 16th, 2007 at 5:54 am

    Thanks Tucson,

    do you happen to have any contact details for Silver Age? I tried a Google, but it didn’t work.

    Thorugh our research we have found that there are 3 models of support:
    1) No support from gov’t
    2) Initial funding (as you have explained)
    3) Ongoing support that is per person on a case by case basis.

    This is definately an issue where there are a number of opportunities for groups like Silver Age. Especially if they are targeting mid market.