According to the announce- ment Shanghai Municipal Administration of Industry and Commerce made on July 8, Shanghai Kaijian Huapeng Aged Service Co., Ltd, the first foreignfunded aged care institution in Pudong District, Shanghai, was approved to be established as the result of Shanghai government’s “16 measures to support the development of Pudong”. The establishment of this company will have a promotional effect on foreigners’investment into the projects of people’s livelihood in China.
Experienced Foreign Shareholders
The file in the Shanghai Municipal Administration of Industry and Commerce shows that the aforementioned company’s business scope is to provide aged care services (including rehabilitation, nursery and daily care) along with the department store within the aged care institutions that provide daily-use products and the retail of medial devices. The registered capital of this company amounts to 3 million U.S. dollars. It is a limited liability company as a result of the joint venture between Chinese domestic companies and the companies from Hong Kong, Macau and Taiwan. The share initiator is Shanghai Shengyuan Development Co., Ltd, Shanghai Skyline Construction Equipment Co., Ltd, China Senior Housing (HKSongjiang) Private Limited. The last one is a fully-owned subsidiary company of American largest community-based aged care service supplier Emeritus Senior Living in Hong Kong. The foreign shareholder has abundant management and service experiences of aged care institutions.
It is known that Shanghai Shengyuan Development Co., Ltd’s parent company Shengyuan Group once founded Shanghai Kaijian Investment Management Co., Ltd with Emeritus Senior Living in China. It also invested in the first Sino-foreign joint venture operative aged care institutions of China. Later, Kaijian Investment was allowed to operate and spread the aged care services in China. It is known Kaijian Investment is allowed and able to copy the experiences of success of Emeritus Senior Living from the United States to China. In the next ten years, Kaijian Investment plans to establish a rehabilitation and healthcare chain network with Shanghai and the Yangtze River Delta as the center. The chain will include hundreds of aged care institutions in China and a dozen of them established in Shanghai.
It is known that the establishment of Shanghai Kaijian Huapeng Aged Service Co., Ltd is the second cooperation between Shengyuan Group and Emeritus Senior Living.
The Opening of Aged Care Market Needs to Be Matured
On June 7, the Shanghai Municipal Administration of Industry and Commerce and the government of Pudong District announced the 16 new measures of further promoting the innovation and transformation of Pudong. These measures made it clear that foreign investors were allowed and encouraged to get into the fields of healthcare and social welfare. It is the first time that foreign companies are allowed to set up wholly-owned or joint-venture aged care institutions in Shanghai.
Data shows that old people over 60 have already taken a quarter of the total population in Shanghai. Experts believed that many foreign aged-care property developers, aged care institutions and large funds had eyed the Chinese aged care market for long but they were tortured by the lack of market access and legal representative qualification. Now the new measures have erased these hurdles, providing the feasibility for foreign investors to touch the Chinese aged care institutions.
“Kaijian Investment’s plan in China is under heavier and heavier scrutiny of similar foreign investment institutions. If the plan succeeds, it means that it is the right time to get into the aged care market of China,” said a director of a foreign-funded aged care consultancy and management company. However, though the establishment of foreignfunded aged care institutions in China has been no longer a problem, the following problems related with land use, facility construction, management and operation are still waiting for operators who are in need of more policy-based support.