Free-trade deal allows aged-care providers into China

AGED-CARE providers have hailed the Australia-China free-trade deal as a “massive” opportunity to diversify their operations and set up nursing homes in what is likely to become the world’s largest market for aged care.

The deal allows Australian aged-care operators to set up and run independent facilities in China, which plans to double the capacity of its residential aged-care sector to eight million beds by 2020.

Previously, Australian operators have been restricted to providing design, training and strategic advice and working in partnership with local firms.

Patrick Reid, chief executive of peak body Leading Age Services Australia, said the opportunity the free-trade agreement afforded was “massive”.

“If you look at the Australian context, it’s 228,000 beds in Australia. You are looking at an amazing multiple of that in China,’’ he told The Australian.

“Where we have 30 beds, they have 30,000 beds. The investment required will be challenging, but it is not insurmountable.

“There is absolutely capacity for Australian entrants. China has an ageing demographic ... but the scale is much larger.

“This is a good opportunity for our providers, who are well-­respected in Asia, especially in China.”

China has more than 194 million people aged over 60, and that figure will explode in the future.

Beijing’s peak policy body revealed plans in September last year to step up development of the industry, saying that by 2020 China would need double its current 3.8 million beds and need to assemble an aged-care workforce of 10 million.

Mr Reid said there were also big opportunities in retirement living, as China’s one-child policy meant many older couples were empty nesters and some wanted a “third party” to assist them with their lifestyle in retirement.

While Australian companies already operate in China, Mr Reid said he expected a surge in interest in targeting the Chinese market.

“Some of our providers are ­already exporting skills and training. The difference here is that they are talking about allowing wholly owned subsidiaries. It does present opportunities, absolutely,” he said.

His organisation would seek funding under the commonwealth’s Industry Skills Fund to educate aged-care providers about the Chinese market and get them export-ready.

However, although the rewards of offshore expansion were greater, so too were the risks, Mr Reid cautioned.

And he said Australia needed another 80,000 beds in the next decade and to triple the size of the aged-care workforce.

The free-trade deal also potentially benefits hospital operators.

Ramsay Health Care, one of the most successful Australian health companies operating in Asia, has announced its interest in entering the Chinese market.

Through its joint venture with Malaysia’s Sime Derby, Ramsay has entered into a non-binding memorandum of understanding to take a 50 per cent stake in Jinxin Group’s healthcare assets in Chengdu, including five hospitals operating more than 2300 beds.

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