China to Boost Silver Economy to Drive Consumption Growth

On February 26, the State Council announced plans to enhance support measures, improve policy enforcement, and foster the growth of the aging economy to tap into its vast potential, driven by the country’s aging population.

The government emphasized the need to further stimulate demand within the senior market, strengthen related consumption capabilities, and utilize policies such as consumption subsidies to create new opportunities and innovative business models catering to elderly consumers, as reported during a recent executive meeting.

In 2024, the size of the senior economy was approximately 7 trillion yuan (about $1.02 trillion), representing roughly 6% of the country’s gross domestic product. This figure is expected to grow to 30 trillion yuan ($4.38 trillion) by 2025, with its share of GDP rising to 10%, according to the Blue Book of the Silver Economy: Annual Report on the Development of the Silver Economy in China (2024).

The country boasts the world’s largest elderly population, with over 320 million people aged 60 and above by the end of last year, according to official figures. Experts forecast this number will exceed 400 million by 2035.

The recent council meeting recognized the senior economy as a new major growth sector with significant potential, emphasizing the importance of addressing both fundamental needs and emerging demands of the elderly population, a researcher from the China New Economy Research Institute explained.

By employing strategies like consumption subsidies, creating new scenarios, and innovating business formats, the aim is to shift senior consumer demand from traditional, rigid types to more quality-focused, intelligent, and service-oriented offerings. This approach is expected to turn the elderly population into a vital force supporting the expansion of domestic demand, the researcher added.

The main goal of the meeting’s initiatives is to establish a clear framework and set strategic directions for the senior economy and elderly care services, according to Peng Xizhe, dean of the Fudan Institute of Ageing.

As China enters its 15th Five-Year Plan, two primary objectives will guide the integrated development of the senior economy and elderly care services. The first is to accelerate the building of an efficient, integrated, and sustainable elderly care system. The second is to empower senior-oriented technologies and expand their applications, aiming for significant growth in the sector, Peng explained.

Boosting consumption and expanding domestic demand are now key priorities for future policies, said Wen Bin, chief economist at China Minsheng Bank. With efforts to restore consumer confidence and promote service-related spending, there is a forecast for retail sales growth to rebound to around 5% this year.

Service consumption is expected to play a critical role in this growth trend, according to Ye Fan, chief economist at Southwest Securities. He predicted consumption growth will steadily increase to around 5%, maintaining a positive outlook for the year.