China doubles subsidies for child, elderly care facilities to deal with demographic decline

As China faces an ageing population and declining birth rate, it will incentivise the addition of new space in care facilities to accommodate changes
New version of plan for elder, child care doubles subsidies for new beds, encourages community-based services to bolster existing structure

China's population

Luna Sunin Beijing

Published: 5:30pm, 3 Apr 2024

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To address the rapidly evolving needs of its ageing population – a pressing issue made all the more severe by a sinking birth rate – China has disclosed a strategy to expand its community-based elderly care networks, as well as childcare centres.

In a revised version of an implementation plan for care services covering those both young and old, Beijing said it will further improve resource networks in rural areas. The new iteration of the plan was published in a document released Tuesday by the National Development and Reform Commission – the country’s top economic planner – as well as the Ministry of Civil Affairs and the National Health Commission.

In the adjusted plan, Beijing bumped up subsidies for new establishments for both elderly care and childcare, with each new bed for elderly care added to an eligible facility netting the facility a grant of 50,000 yuan (US$6,911), and 20,000 yuan for each new slot in universal childcare service venues.

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In the original plan, published in June 2021, the corresponding rates were 20,000 yuan and 10,000 yuan per new slot.

The change comes as China grapples with twin demographic challenges – an ageing population and a declining birth rate. These trends have fuelled fears of a diminished labour force, stretched social welfare systems and substantial healthcare expenses.

These looming worries have cast a shadow over the nation’s economic growth – already haunted by a slump in the property market, debt woes for local governments and a need to alter China’s conventional investment and export-oriented growth model as global socioeconomic conditions grow complicated.

China had 216.76 million people aged over 65 last year, up from 200 million in 2021 according to official data. The Economist Intelligence Unit said in a February report that people over 60 will account for 32.7 per cent of China’s population by 2035, up from 21.1 per cent in 2023. The proportion of those 65 and above will also rise, from 15.4 per cent last year to 25.1 per cent by 2035.

Low birth rates have compounded these trends. The country’s population dropped for a second year in a row in 2023, down to 1.4097 after a 2.08-million-person decline. In the same year, only 9.02 million births were reported – the lowest level since record-keeping began in 1949.

To account for these changes – and the resultant shrinking of informal familial care networks for both groups – the country will “further improve the infrastructure conditions for elderly care and childcare services,” the plan said, encouraging greater provision of “inclusive services” and a strengthening of the three-tiered elder care network linking counties and rural areas.

However, the original plan had apportioned up to 100 million yuan to pilot cities as part of a project for what were termed “child-friendly cities”, places which would build robust public services to improve quality of life for the youth.

That rhetoric was omitted entirely in the new version, with the focus shifted towards elderly care. The plan named home-based community care networks as another method to tailor to the needs of the elderly, encompassing disability care, provision of meals and help with bathing, cleaning, medical care and transport.

“Support will be extended to public healthcare institutions in areas with surplus medical resources and underutilised bed capacity to establish new facilities,” it said, “or expand existing ones for integrated medical and elderly care services.”