Care for the aged with social capital

China should encourage more social capital to join in caring for the aged, says an editorial in the 21st Century Business Herald. Excerpts:

The civil affairs bureau of Beijing announced recently its welcome of social capital participation to the cause of caring for senior citizens. The national civil affairs authority also vows to consider more-favorable policies this year in land, finance and tax to encourage more social capital to join the cash-thirsty field. For example, the government will subsidize 40,000 yuan ($6,450) to 50,000 yuan for each bed funded by social capital.

Statistics show the caring-for-the-aged industry in China needed about 1 trillion yuan in 2012, but only 100 billion yuan was secured, leaving a large gap for social capital. China needs about 8 million beds for its aged population, but only 2.66 million beds are ensured. Because of the family planning policy, the real demands for the berths may be higher than the expectations.

Now social capital must register as enterprises to do the business. Otherwise, it will be almost impossible for private capital to survive in the industry. The Civil Affairs Ministry should create a more favorable environment as it claimed this time for social capital to contribute to the cause in a more flexible way. For example, the family-based model of caring for the aged in communities is a practical choice for China. The government should let the society and market have the freedom to find self-sufficient and sustainable models of caring for the aged.

While encouraging private capitals in various forms to join in the huge market, the ministry should not neglect supervision and regulation of the burgeoning market.