These baby boomers – defined in the report as those born in the 1960s – know more about covering their health care needs, and this is set to “drastically change” trends in the country, Said Will Stephens. Pacific Head of Quantitative and Systematic Strategy at the bank.
The report said that 1,500 middle-aged and elderly consumers surveyed in China felt the effects of the aging population across a wide range of industries, from healthcare to insurance and travel and e-commerce Will go.
Stephens said the group was “the largest group in history” – or about 245 million Chinese, and highlighted differences compared to the current generation of retirees.
“I think the key difference here is the huge scale and size of the current generation of Chinese baby boomers who are going to retire in the next 10 years,” he said. “This boomer generation has come to the right age at various points in China as well as the point of greatest growth trend in history. So their consumption is very different,” he told CNBC on Tuesday. .
Citing the survey, Stephens reported that 39% of baby boomers expected existing health care social security plans would not meet their needs.
“There is definitely a concern around this security circle,” he said. “There is a lot of interest in insurance products, and at the same time we also see that it is likely to act as a catalyst for reform in the () social security system in China – things like increased transfer of state-owned shares , Possibly raising equity cap in government pension funds. ”
According to the report, with GDP per capita ranging from 2,100 to $ 10,000 in the last 10 years, the Chinese have become rich.
Analysts said in the report, “At US $ 10,000, the middle class has begun to emerge in China and they have a lot of ground to build insurance coverage.” Life and Health Insurance.
A man is pushed in a wheelchair in a street in Beijing.
Wang Zhao | AFP | Getty Images
As a result, he wrote, there is “huge potential” for further commercial insurance development, including pensions.
At the same time, the Kovid-19 crisis may be “some sort of silver lining to accelerate health care infrastructure spending in China”, Stephens told CNBC, saying it compared to most developed economies is less.
Quality Medical Services in Demand
According to the findings of the survey, baby boomers are demanding high quality medical services.
The report stated, “We believe that high-end, integrated private hospitals are likely to benefit from an aging population that is quality-conscious.” In fact, the revenue compound annual growth rate of private hospitals reached 23.9% between 2014 and 2018, an increase from 10.4% seen by public hospitals.
As such, there will also be demand for high-end medical consumables, such as implants and coronary stents. According to the report, orders for big-ticket medical equipment such as ventilators, dialysis machines and MRI equipment used in hospitals may also increase.
The health food sector will be the “major beneficiary”, said Credit Suisse, which predicted annual growth of over 7% for the next few years.
The bank said the sector is worth 340 billion yuan ($ 49.8 billion), accounting for 17% to 20% of global sales in 2017.
“Although China’s adoption of health food is in its infancy, we believe that it will follow the trend of developed countries, especially with their Asian neighbors, including Japan and Korea,” the report said. .