Analysis: The Trillion-Dollar Opportunity in China’s Aging Demographics

China’s “silver economy”—economic activity related to its elderly population—has been growing rapidly. In 2023, it had a value of about 7 trillion yuan ($965 billion), or 6% of GDP, and is projected to rise to 19 trillion yuan (10% of GDP) by 2035 due to a swiftly aging population and expected improvements in elderly well-being.[para. 1] As of 2023, 220 million people (15.6% of the population) were over 65, with this group expected to surpass 380 million (30.9%) by 2050. Rising life expectancy, which the World Bank expects to approach 85 years by 2050 (up from 78 in 2021), will boost both the number and quality of life of China’s seniors, expanding their economic influence even further.[para. 1][para. 2]

The country’s dependency ratios are rising: in 2023, the total dependency ratio was 40% and the elderly dependency ratio 20%, both of which will keep increasing.[para. 3] Experience from aging societies such as Japan shows that as the elderly share rises, household consumption patterns shift: healthcare, housing, transportation, and communications see faster growth, while consumption of clothes, furniture, education, and entertainment drops.[para. 4] Between 1990 and 2005, Japan saw healthcare spending rise at 2.6% annually (beating nominal GDP growth of 1.2%), nutritional supplements at 10.1%, while apparel and furniture saw annual declines of 3.9% and 1.4%, respectively.[para. 4][para. 5][para. 6][para. 7][para. 8][para. 9] Similar trends are emerging in South Korea, where from 2015 to 2024, retail sales for food (7.2%) and pharmaceuticals (5.9%) outpaced overall retail growth (5.1%).[para. 10] Pharmaceuticals nearly doubled in value, reflecting an aging-driven surge in health demand.[para. 11][para. 12][para. 13][para. 14]

Within China, provinces with higher aging rates spend a larger share on healthcare. For instance, Liaoning’s elderly rate is 20% with healthcare spending at 7.4% (vs. Guangdong’s 9.6% and 4.8%, respectively).[para. 15]

The financial position of Chinese seniors is robust, thanks to long-term home ownership and rising property prices. Those born in the 1960s and 1970s benefited from home value appreciation—Beijing home prices grew over 10% annually from 2000 to 2020, and the population over 45 holds most real estate wealth.[para. 17][para. 18][para. 19][para. 20] Family size is shrinking (from 3.1 people per household in 2010 to 2.6 in 2020), reducing pressure from child-rearing and increasing economic independence among the elderly.[para. 21] In 2020, 55.7% of seniors lived with only a spouse or alone; reliance on family support dropped to 32.7%. Willingness to spend on quality lifestyles is rising, especially in lower-tier cities, with average household expenditures by those aged 46+ up 2% in 2024 overall, and as high as 6.2% in fourth-tier cities.[para. 22][para. 23]

China’s government is responding with robust policy support. The 2024 "No. 1 Document" on the silver economy and subsequent local actions are promoting age-friendly renovations, nursing robots, convenient living environments, and direct consumption subsidies.[para. 24][para. 25][para. 26][para. 27][para. 28][para. 29] Policy targets include improved health services, technological innovation, and fiscal incentives for senior living, especially in areas like healthcare capacity (where China currently lags far behind Japan and Germany in facilities and staff) and age-appropriate renovations (70% of urban homes lack elevators).[para. 31][para. 32]

Learning from Japan and others, China is considering unified long-term care insurance, preventive health services, and greater investment in smart elder care technologies like nursing robots, aiming to delay disability and reduce care burdens.[para. 38][para. 39][para. 40][para. 41] Ongoing reforms are expected to expand the economic toolkit available for managing an aging society and to further boost the silver economy’s role in China’s next phase of development.[para. 42]