245 million China’s baby boomers are set to retire
September 02, 2020 @ 09:32 +03:00
China’s baby boomers are set to retire in the coming years, and they’re spending in different ways compared to the current retirees, according to a Credit Suisse report. These baby boomers — defined in the report as those born in the 1960s — are more aware of having their health-care needs covered, and that’s set to lead to a “very sharp shift” in trends in the country, said Will Stephens, Asia Pacific head of quantitative and systematic strategy at the bank.
Effects from the aging population will be felt across a wide range of industries, from health care to insurance, and travel and e-commerce, according to the report, which surveyed 1,500 middle-aged and elderly consumers in China. Stephens said the group was “the largest cohort in history” — or about 245 million Chinese, and highlighted the differences compared to the current generation of retirees.
“I think the key difference here is the sheer scale and size of the current generation of Chinese baby boomers that are going to be retiring over the next 10 years,” he said. “This boomer generation came of age right at the cusp of China’s inflection point into what’s essentially the greatest growth trend in history. So they have very different consumption patterns, different interests than what we see amongst the current retirees,” he told CNBC on Tuesday. Citing the survey, Stephens pointed out that 39% of baby boomers expect that existing health-care social security plans will not likely meet their needs.
As a result, there’s “huge potential” for the development of commercial insurance ahead, including pensions. Baby boomers are demanding high-quality medical services, according to the survey findings. As such, high-end medical consumables will also be in demand, such as implants and coronary stents. Orders for big-ticket medical equipment such as ventilators, dialysis machines and MRI equipment used in hospitals may also increase, according to the report. The health food sector will be a “key beneficiary,” said Credit Suisse, which predicted annual growth at more than 7% for the next few years. That sector is set to be worth 340 billion yuan ($49.8 billion), which forms 20% of global sales – up from 17% in 2017, the bank said.
China’s baby boomers are set to retire, triggering a sharp shift in health-care trends, CNBC, Sep 2