China actively fosters market players in eldercare services

As China's population continues to age, the silver economy is rapidly emerging as a new growth engine of the economy. An analysis of the major challenges currently existing shows that cultivating diversified, professional and well-regulated market entities in eldercare services play a critical role in unlocking the potential of the silver economy and building a high-quality senior care services system.

China has entered a stage of moderate aging, characterized by a large elderly population and rapidly upgrading demand structures. This is not only a major issue in social development, but also gives rise to a vast consumer market and an expansive blue ocean — the silver economy. The core of developing the silver economy lies in effective supply. The traditional, government-dominated eldercare services model can no longer fully meet the growing demand for diversified and higher-quality services. Therefore, vigorously fostering dynamic, innovation-driven eldercare service market entities — including enterprises, social organizations and institutions — and enabling them to become the main providers of services is an inevitable path to vitalizing the silver economy and upgrading senior care from "basic support in old age" to "quality well-being in old age". This carries significant practical importance and strategic value.

First, such cultivation helps stimulate market vitality and optimize resource allocation. The introduction of diversified market entities can break supply monopolies and, through market competition mechanisms, promote services innovation, management optimization and improved efficiency, allowing resources to flow more precisely to areas with strong demand.

Second, it meets diversified needs and drives industry specialization. Market entities such as enterprises are more sensitive to demand signals and can develop segmented industries tailored to elderly people with different healthcare needs, income levels and cultural backgrounds. These include home-based care, community care, institutional care, integrated medical and elderly care, smart elderly care, senior cultural tourism and rehabilitation assistive devices, forming a rich and complete industry chain.

Third, it attracts social capital and strengthens development momentum. Clear profit prospects and a sound business environment can attract substantial social capital into the eldercare sector, compensating for insufficient government investment and providing sustained financial and professional support for industry development.

Fourth, it promotes employment and entrepreneurship and expands social participation. The senior care services sector combines labor-intensive and knowledge-intensive characteristics. Its development can create a large number of jobs in professional nursing, health management, technology research and development, and operations management, becoming a new source of employment growth.

First, policy frameworks need improvement, and implementation requires strengthening. Although supportive policies have been frequently introduced, specific preferential measures related to land use, financing, taxation and talent development sometimes encounter "glass doors" or "revolving doors". Policy coordination and stability still need to be enhanced.

Second, weak profitability and long investment return cycles hamper the sector. Eldercare services require large upfront investment and high professional standards, while structural mismatches exist between elderly people's willingness and ability to pay. As a result, many market entities face profitability challenges, undermining long-term confidence among social capital investors.

Third, severe shortages of professional talent and insufficient workforce stability still exist. There is an overall shortage of professionals in nursing, rehabilitation and psychological services. Unclear career development pathways, low social status, and a mismatch between labor intensity and remuneration are prominent issues, constraining improvements in service quality.

Fourth, market order needs regulation, and regulatory mechanisms require innovation. Service quality standards are not uniform, and in some areas, there is disorderly competition or fraudulent behavior, damaging the industry's reputation. Regulation of new business forms and models needs to keep pace with developments.

Fifth, insufficient support from the payment system, with demand-side potential not fully released, also slows the sector's growth. The long-term care insurance system remains in the pilot stage, and commercial eldercare insurance products are not sufficiently diverse. As a result, effective payment capacity has not yet fully formed, limiting the rapid expansion of market scale.

Suggestions for the coordinated pathways and strategies for cultivating the silver economy are as followed:

First, optimizing top-level design and strengthening policy integration and implementation are essential. Enhancing cross-departmental coordination, systematically reviewing and integrating policies related to land use, planning, fiscal support, finance and taxation, and forming a coordinated "policy package" are key tasks. Simplifying administrative approval processes, promoting negative list management, and lowering market entry barriers are also needed steps alongside establishing evaluation and feedback mechanisms for policy implementation to ensure that preferential policies directly benefit market entities.

Second, financing channels should be broadened and support mechanisms made more innovative, along with leveraging government industrial guidance funds to attract more social capital. Encouraging financial institutions to develop credit products tailored to eldercare projects, exploring financing models such as accounts receivable pledges and service fee right mortgages, and supporting eligible senior care service enterprises in pursuing public listings or issuing bonds should all be promoted.

Third, sector participants should strengthen talent development, enhance occupational attractiveness, promote the expansion of relevant programs in vocational institutions and deepen school-enterprise cooperation, as well as establish sound systems for vocational skill certification and career advancement, improve remuneration and social status, and implement incentive measures such as special subsidies and onboarding bonuses for eldercare workers.

Fourth, the industry must improve standards and regulatory systems to guide healthy industry development, accelerate the formulation and improvement of national and industry standards for service quality, grading, and safety management across various sub-sectors, build a new, credit-based regulatory mechanism, strengthen ongoing and post-event supervision, give full play to the role of industry associations and enhance industry self-regulation.

Fifth, participants and regulators should deepen payment system reforms to unleash effective demand, accelerate the expansion of long-term care insurance pilots, gradually establish an independent and sustainable nationwide system, encourage the development of commercial long-term care insurance and senior care-dedicated savings products, and explore mechanisms for subsidizing senior-friendly products and services consumption.

Sixth, the industry should encourage technological empowerment and model innovation, support enterprises in applying technologies such as the internet of things, artificial intelligence and big data to develop new models including smart elderly care and remote care, promote innovative approaches such as "property management services + eldercare services" and mutual-aid elderly care models like "time banks", and finally, advance integrated development between eldercare and industries such as healthcare, tourism, culture and education.

In summary, cultivating and strengthening market entities in senior care services is critical for developing the silver economy and addressing an aging demographic. This is not a single market-driven action, but a systematic endeavor requiring coordinated efforts from government, markets and society. Only by continuously optimizing the business environment, overcoming development bottlenecks and stimulating endogenous momentum — while guiding market entities toward professionalization, scale and branding — can a diversified, high-quality, well-regulated and well-funded eldercare services system be established. Ultimately, this will not only foster a vibrant new ecosystem for the silver economy, but also tangibly enhance the sense of fulfillment, happiness and security of hundreds of millions of seniors, achieving an organic unity of economic and social benefits and injecting new vitality into China's sustainable economic and social development.

The writer is a scholar at Renmin University of China and a professor at the university's School of Public Administration and Policy.

The views do not necessarily reflect those of China Daily.