ANI
02 Mar 2021, 14:48 GMT+10
Washington [US], March 2 (ANI): Rooms and beds for Chinese retirees are in short supply as the population is ageing, leaving many vulnerable to companies pitching risky investments, reported The New York Times.
By 2050, half a billion people in China will be 60 or older, according to government estimates. China's looming elder-care crisis has provided an opening for fraudsters and Ponzi-like investment schemes, according to the Chinese government.
Alexandra Stevenson and Cao Li, writing for The New York Times reported that hundreds of scam cases are under investigation. The Chinese authorities have prosecuted many companies who are involved in retirement home scams.
The inquiries so far have covered hundreds of millions of dollars in money raised with the promise of securing a room or a bed. The problem has become so widespread that China's top judicial bodies have labelled the retirement industry one of the sectors hardest hit by what they call illegal fund-raising, reported The New York Times.
In Yiyang, a retired handyman was so distraught after losing the life savings that he threw himself into a river last month and drowned, according to state media.
Traditionally Chinese families have taken care of elderly parents. In the wake of China's now-defunct one-child policy, and because of mass migration to big cities, fewer people can care for the ageing population. The government provides care to only the most vulnerable, known as the "three no's" -- those with no family, no financial support and no ability to work.
"We have a continuously ageing population, and government-funded public services are not enough to look after this population," said Dong Keyong, a professor at the School of Public Administration and Policy at Renmin University of China in Beijing.
China's government has turned to the private sector, promising subsidies and tax benefits for companies that build homes. But the cost of building a nursing home is high, and the rewards are often too low because most people cannot afford high-quality care, reported Alexandra Stevenson and Cao Li.
In Beijing, for example, the monthly bill at retirement homes can be as high as USD 1,500, according to one report, triple the average retirement paycheck of USD 535 a month.
To surmount those challenges, some builders skirt laws that forbid them to accept money from residents before the retirement homes are built. Instead of pre-selling a home or a bed directly, those builders create side investment products that promise high interest rates in addition to future membership benefits.
The authorities and elder-care experts say financial products often turn into Ponzi-like schemes. Money raised from later investors is sometimes used to pay earlier investors. If they can't pre-sell enough homes or beds to start construction, the project evaporates -- and so does the money.
Seniors in rural areas could be especially vulnerable. They often live alone because their children have moved to big cities for jobs. About 16 million elderly people had been left behind in rural areas, according to a 2016 survey by the Ministry of Civil Affairs.
Many older adults "don't have the financial resources to pay for long-term care services and they don't have children who can provide the care for them, so they are basically stuck," said Bei Wu, a professor of public health at New York University who has studied China's elderly for three decades. (ANI)Get a daily dose of New Jersey Telegraph news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to New Jersey Telegraph.
More InformationMILAN, Italy: Italian regulators have flagged four non-EU countries—including Russia—as carrying systemic financial risk for domestic...
NEW YORK CITY, New York: With just weeks to spare before a potential government default, U.S. lawmakers passed a sweeping tax and spending...
PARIS, France: Fast-fashion giant Shein has been fined 40 million euros by France's antitrust authority over deceptive discount practices...
PALO ALTO/TEL AVIV: The battle for top AI talent has claimed another high-profile casualty—this time at Safe Superintelligence (SSI),...
FRANKLIN, Tennessee: Hundreds of thousands of Nissan and Infiniti vehicles are being recalled across the United States due to a potential...
REDMOND, Washington: Microsoft is the latest tech giant to announce significant job cuts, as the financial strain of building next-generation...
WASHINGTON, D.C.: President Donald Trump is drawing praise from his core supporters after halting key arms shipments to Ukraine, a...
MOSCOW, Russia: This week, Russia became the first country to officially recognize the Taliban as the government of Afghanistan since...
CAIRO, Egypt: This week, both Hamas and Israel shared their views ahead of expected peace talks about a new U.S.-backed ceasefire plan....
WASHINGTON, D.C.: The Trump administration has made public a visa decision that would usually be kept private. It did this to send...
MADRID, Spain: Liverpool footballer Diogo Jota and his younger brother, André Silva, have died in a car accident in Spain. Spanish...
LONDON, U.K.: An unrelenting heatwave sweeping across Europe has pushed early summer temperatures to historic highs, triggering deadly...