Back in June, we talked about the serious crisis facing the education sector in much of Asia. Taiwan joined Japan and South Korea in mass classroom closures due to a serious demographic crisis. China, where we said last week that “schools” are for pets, not children, is changing things up because the birth rate is not increasing. In the country where 300 million retirees live, schools are turning into nursing homes.

News. In recent months, the demographic crisis in China has been worsening the education sector. What started as a trickle turned into a scourge that resulted in the closure of thousands of preschools across the country as enrollment dried up.

But times are changing and the space until recently occupied by minors is witnessing the development of a new type of business. Now there are games and dances in the classroom, but the age of the participants has changed. Schools have been converted into homes and entertainment centers for people of retirement age or the elderly.

Closing schools. A few weeks ago, Nikkei described the example of Angels Kindergarten, a prestigious private school in Shanghai that closed completely in 2023 after 18 years of operation, abandoning its campus and pointing to an alarming trend: the mass closure of kindergartens across the country.

More than 20,000 nurseries closed from 2021 to 2023, and the number of these centers decreased from 294,832 to 274,480. This phenomenon particularly affects private institutions, which are subject to a shrinking student base due to a decline in births.

Demographic crisis and teacher stampede. In 2023, the number of children enrolled in pre-school education decreased by 5 million, reaching its lowest level since 2014. At the same time, more than 170,000 pre-school teaching jobs have disappeared, demonstrating the deep impact of the crisis on the education system and schools. labor market.

To all this we must also add the financial pressure on families, as in the case of Li, a mother in Jiangsu province who already spends more than 10,000 yuan (about 1,300 euros) a month on her 2-year-old daughter. She cannot afford to have more children.

A (un)sustainable business. Yu Bo, who has successfully operated 11 nurseries in Shandong province for more than two decades, began to notice a significant decline in enrollment from 2022 onwards. On its best days, the center didn’t even need to advertise its services; Families competed to reserve a place for their children before they were born.

However, after the pandemic and with the reopening of the centers, enrollments did not return to previous levels. In one of the kindergartens he managed to recruit only a third of the students compared to previous years. With the population rapidly decreasing, Yu Bo, like many in his situation, realized that his business model was no longer sustainable. After closing three nurseries in 2023, he started looking for new opportunities. With 300 million retirees and the expectation of hundreds of millions more soon, the solution seemed clear.

We are changing schools for nursing homes. It’s no secret, but this change in pattern is another sign that China is rapidly aging. Yu felt that this emerging market could present a lucrative opportunity. It has established an activity center for seniors and plans to expand with nursing homes. There are many people following the same path.

“The problem became particularly evident as the number of children continued to decrease,” said Li Xiuling, director of a nursery converted into a senior center in Shanxi province. “After my kindergarten became empty, I thought about how I could make the most of it.” The preschool center was founded in 2005 and once served 280 children, but reopened last year as a center for people of retirement age or older, a space where music, dance, modeling and other subjects are taught to older children.

More examples. Another entrepreneur, Zhuang Yanfang, who previously ran a nursery, also decided to adapt his business to caring for the elderly. After 25 years of operating his headquarters in Zhejiang province, he realized his business was no longer profitable.

Zhuang transformed his facilities with safety equipment, elevators and redecorated classrooms, turning them into rooms and recreation areas for the elderly. Their approach is similar to running a daycare, but in this case it’s about “providing a quality life for the elderly, offering activities such as singing, board games and calligraphy lessons.”

Elderly care is an uncertain future. As a result, elderly care in China is still in its infancy, with no established models or adequate government guidance. China saw a significant increase in its elderly population last year, adding approximately 17 million people aged 60 and over. An age group that currently represents over 20% of the population; This ratio is expected to increase to almost one third by 2035.

Ideas? The Beijing government plans to establish a “relatively robust” national aged care system by 2025 (there are talks of 250,000 workers concentrated there), but the country has no retirement homes and faces regional disparities in coverage. The truth is that, despite government pressure, the sector faces a lack of experience and structure, which is why this “emerging” boom in former schoolhouses is seen as a solution wrapped in the biggest paradoxes.

It is also unknown whether the government’s efforts will have sufficient incentives. Beibei, a recent graduate in elderly care, says that although it is easy to find a job, the salaries are meager, earning about 3,000 yuan (390 euros) a month, below the Guangzhou city average. Beibei also said workers face a lot of paperwork to comply with government assessments, creating additional stress.

Care of the elderly in an uncertain future. We cannot ignore the fundamental problem. The decline in birth rates in China not only affects the education sector, but also creates serious challenges for the country’s economic future. As the workforce shrinks, the nation’s ability to sustain rapid growth and develop a skilled workforce is jeopardized. Elderly care is another symptom.

In fact, the decline in the birth rate threatens to aggravate the problems of population aging, a phenomenon that, as we said before, is already affecting countries such as Japan. Experts such as Yuki Katayama of the NLI Research Institute in Tokyo are clear on this issue, warning that prioritizing elderly care without strengthening child care policies could lead to a similar crisis in China.

Meanwhile, pet schools are growing rapidly.

Image | FMS, FMS

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