|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, which is largely driven by urbanization. The proportion of people above the age of 60 across the PRC is expected to grow from roughly 12% in 2010 to 34% by 2050. The PRC's population is aging rapidly at a time when the per capita income remains modest; social security systems cover a broad portion of the population, but are still insufficient to meet 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. Furthermore, the current acute shortage of caregivers and nurses specialized in elderly care, most of whom are women, is exacerbated by low compensation levels and working conditions that make these professions unattractive.
The PRC has been addressing the consequences of its aging population since the late 1970s, with successive policies to finance old age care, stimulate private sector participation, define the responsibilities of families, and organize community-wide responses to support the elderly. The PRC's Twelfth Five-Year Plan, 2010 2015 further recognized these challenges. It called for establishing an old age care system (with targets for home-based care, community care, and 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 remain. The challenges include insufficient elderly care services and products, an underdeveloped market, and imbalanced regional rural urban development. The opinions of the State Council include a comprehensive list of policy directions; set development goals; describe organization and management arrangements; and assign responsibilities to combine public, private, and civil society efforts.
In the PRC, children traditionally took primary responsibility for caring for their parents' medical and nonmedical needs (e.g., daily activities and emotional and financial requirements). However, the ability of children to meet this traditional responsibility is increasingly challenged by several factors, including small family size (resulting in part from the one child policy), high labor force mobility, the 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 the poor elderly includes (i) payment of social pensions 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 also live in poverty.
Currently, only childless elderly people 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 welfare assistance recipients are generally ineligible for care subsidies by the government. There is a need for the government to expand subsidies for these elderly people, including to low-income households that are slightly above the poverty threshold (the marginal poor).
Yichang Municipality submitted a project proposal to ADB through the Ministry of Finance to provide TA to strengthen local policies and strategies, and to update