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Earlier this year, 65-year-old Zheng Weigang was whiling away his days at a down-at-heel state-run retirement home in Beijing when he heard from friends about a new, privately run home on the city's outskirts. The retired engineer rang up the new home and within a few hours it sent over a driver to bring him around for a tour. Impressed, he made up his mind to move there immediately. 

Zheng is lucky: He had the choice of whether to live with his family, or move to a state or private retirement home. For an increasing number of retirees, such decisions are being taken out of their hands as China struggles to cope with its rapidly greying population. Currently, the elderly account for just over 10% of the population. By 2030, that figure will have risen to 22%. Add to this the pressure on people to work longer hours, plus a decline in filial piety--the traditional sense of obligation to care for ageing parents--and many elderly people and their families are finding themselves opting for an alternative unthinkable a generation ago.

That alternative is the state or private retirement home. These are mushrooming across China. According to the Ministry of Civil Affairs, China already has more than 40,000 retirement homes, with 308 in Beijing alone. But they face many obstacles. In a country where it's not rare to find three generations of a family crammed into a small apartment, people have traditionally eyed retirement homes with suspicion. In recent years, though, successful private homes have been chipping away at this prejudice.

"Before, neighbours would look down on you if you sent your parents to a retirement home, but today people are more open-minded," says Howard Luo, public relations director for Lucent Technologies in China, which funds a hospice for the elderly.

The home Zheng moved to--the grandly named Taishen International House of Respect for the Aged--is a good example of how the private sector is turning grey into gold. Owned by the electronics conglomerate Taishen Group, the home opened in October last year, and now caters for 300 residents (an 80% occupancy rate). According to Director Yang Haijin, the home is already making an operating profit.

Before opening, Taishen carried out market research to try to break the walls of suspicion surrounding retirement homes. It found two main problems. The first was that, because of China's tumultuous recent history, the elderly want to hang on to their money. If they spend, they want to know what they're getting for their money, and they're reluctant to indulge themselves. "Many Beijing private homes are hotels that offer luxurious service," explains Zhang Fang, a spokesman for Taishen, "but elderly people are thrifty."

Taishen responded by specifically listing all the expenses, from the daily cost of a room (40 renminbi, or about $5) to eating in the cafeteria (9 renminbi a day). For basic room and board, that adds up to about 1,500 renminbi a month--the average pension of a college-educated professional in China.
The second and more perplexing problem Taishen encountered was the deep cultural distrust of retirement homes among the elderly--a distrust the Ministry of Civil Affairs believes is behind the 10%-15% vacancy rate in state homes. Some old people would rather live alone in often bleak conditions than move to a home, which they fear would lead neighbours to believe there were problems in the family.

Such fears are difficult to dislodge, but Taishen tries to show old people that its home is at least a comfortable place to live. "To relax their fears and win them over, we would bus in the elderly and give them tours--it took a while but it worked," explains Zhang. His colleague, Yang, believes the design of the home helps. "Other homes are unfriendly apartment-style but Taishen is a large courtyard-house--our idea is to create a 'big family.'"

Guests at the home do seem genuinely to enjoy living there. "The staff are always thinking of how to serve us better," says Jin Zhongping, 77, as he sits on a balcony overlooking a placid pond.

His views are echoed by Jia Fushui, a director of the government's Chinese Senior Citizens Association: "Taishen is the best. Its architecture and ambience are superior, its service is very considerate," he says. Still, he criticizes the home's dormitory-style accommodation, which he believes hurts its ability to draw in Overseas Chinese. "International retirement homes ought to give couples the option of their own apartment where they can cook their own dinners and live in seclusion. Taishen doesn't offer that." Taishen's Zhang repeats: "We're trying to create a big family here."

Regardless of its ability to attract Overseas Chinese, Taishen--like many other private homes--is proving a sound investment for its owners. Last year, the newspaper China Real Estate News reported that the average private retirement home in Shanghai had 80% occupancy and made a return on investment in four years. Indeed, Chinese economic journals regularly cite retirement homes as good investments.

But while retirement homes are winning more acceptance, old prejudices haven't been totally eradicated. Early this year, for example, Beijing teacher Yuan Guozhi decided to send his parents to a retirement home after his father was diagnosed with a serious illness. His brothers and sisters objected, as did the two old people, but as the eldest son Yuan had the final say. After two months, Yuan's younger brother took his parents home with him, alienating his own wife and creating a rift with his brother that still hasn't healed.

China faces other barriers to caring for the elderly. Private homes can cater for only the relatively well-off, while the cost of providing state care for all pensioners threatens to cripple future taxpayers. There are now 10 people of working age for every pensioner. In 50 years' time, there will be just three workers for every pensioner.

The government would like families to continue caring for their elderly, "but we know that will be impossible because of the one-child policy," says a senior official at the Beijing Social Welfare Civil Administration Bureau, who asked to be identified only by his surname, Wei.

So the government is hoping increasingly to spread the burden across the family, the state and the private sector. To do this, Wei explains, it will pursue strategies like transporting the elderly from their homes to centres where they can eat and take part in activities every day, before returning to their own homes at night. As Jia of the senior citizens association says, "the trend is towards the integration of community care with family care." Wei adds that the private sector's role will be recognized by the creation of a special bureau to oversee private firms caring for the elderly.

But the growth of the private sector risks being hindered by lack of foreign investment. "We're allowing joint ventures," Wei says, "but we limit it because this is such a sensitive topic"--meaning, perhaps, that the state fears losing face if it has to depend on foreigners to care for the elderly. Director Yang of Taishen says his company is looking for foreign partners, but many are reluctant to become involved because the Chinese government doesn't provide incentives, like tax breaks and cheap land, as it does with other industries.

Still, even without foreign investment, it looks as if China's private retirement homes will continue to grow, as more and more elderly choose comfort over tradition.