|Project Rationale and Linkage to Country/Regional Strategy
The main demographic challenges facing the PRC in this century are the dramatic aging of its population and the scale of internal migration largely driven by urbanization. The proportion of people above the age of 60 across the PRC is expected to grow from roughly 12% to 34% from 2010 to 2050. Aging in the PRC is happening at an accelerated pace when the per capita income is still modest and social security systems, although wide in population coverage, are still insufficient to cover the financial needs of retired senior citizens as illustrated by the Yichang experience. The high cost of care for the elderly will require long-term care financial coverage mechanisms to avoid major inequities in the way people experience their life as seniors. The current acute shortage of caregivers and nurses specialized in elderly care is exacerbated by compensation level and working conditions that make these professions unattractive.
The PRC has addressed aging of the population and its consequences since the late 1970s with successive policies to finance old age care, stimulate private sector participation, define families' responsibilities, and organize community-wide responses to support the elderly. The PRC's 12th Five-Year Plan further recognizes these challenges. It calls for the establishment of an old age care system (with targets for home-based care, community care, institutional care); expanding grassroots aging associations; encouraging volunteerism among senior citizens; and improving health management services.
The 2012 revision of the Elderly Law, includes requirements for local governments to develop community services for senior citizens. The recent opinions of the State Council (September 2013) to accelerate the development of the elderly care service industry recognizes the progress made and the significant challenges that still exist. It includes a comprehensive list of policy directions; sets development goals; describes organization and management arrangements; and assigns responsibilities to combine public, private, and civil society efforts.
Traditionally children have the prime responsibility to care for their parents' medical and nonmedical needs (e.g., activities of daily living, emotional, and financial). Children's responsibility is challenged by several factors such as small family size due, among others, to the one child policy, high labor force mobility, high labor participation rate of women, increasing financial burdens on the families of children with the duty to care, and the eroding importance of filial piety. Support provided by the government for poor elderly includes (i) payment of social pension for poor rural and urban citizens; (ii) provision of residential or community-based care services for selected elderly living on social assistance; and (iii) support to the most destitute, including childless old people; and elderly whose children live in poverty as well.
Currently only childless elderly living on social assistance such as the Three Nos in the cities and Five Guarantees households in the countryside are provided residential or community-based care services by the government. Other elderly dibao recipients are generally ineligible for care subsidies by the government. Obviously, there is a need for the government to expand subsidies to these old people and to other low-income households slightly above the poverty threshold (marginal poor).
The Municipality of Yichang, Hubei Province submitted a project proposal to the Asian Development Bank (ADB) through the Ministry of Finance to provide technical assistance to strengthen local policies and strategies, and to prepare a comprehensive plan and a way forward for the municipality to address elderly care issues for the urban population. Hubei Province has recommended Yichang to become a model city for the provision of elderly care in the PRC. The TA findings will potentially be replicable in Hubei and nationally, and will contribute to the growing body of knowledge on financing elderly care in the PRC. In 2012, Yichang Municipality had a total population of over 4.00 million, an urban population of 1.34 million, and senior citizens over 60 years of age reached 652,100, representing about 16.06% of the overall population and above the national average of 13.70%. The Municipality adopted an elderly service facilities construction plan in urban areas of Yichang City in accordance with the 12th Five-Year Plan of the PRC.