Page 8 - THE SOUTH CHINA BUSINESS JOURNAL
P. 8
PTH Further, the measures encourage governments
to offer other means of financial support, such
・The income obtained from providing as by subsidizing loans, providing financing
community eldercare, childcare, and domestic credit enhancement support, and providing
service shall be exempted from VAT. liability insurance support.
・The income derived from providing community Why eldercare and childcare are
eldercare, childcare, and domestic service shall be
included in the total income by 90 percent when important for China
calculating the taxable income amount.
Assisting the eldercare and childcare industries
・Exemption from deed tax for housing and land is a priority for the Chinese government not just
used to provide community eldercare, childcare, because they have been negatively impacted by
and domestic service. COVID-19, but also because of their
social importance.
The electricity, water, gas, and heat used by
eldercare and childcare institutions shall be at China is one of the world’s most rapidly aging
the rate for residential use, rather than the rate countries, and new childbirths continually lag
for commercial or industrial use. behind the government’s goals. As a result of
The residential usage rate is much lower. The China’s skewed demographics, its working-
measures also call on local governments to age population will soon decline rapidly while
implement further incentives for eldercare and the proportion of its dependent population –
childcare service providers. comprised of children and seniors – will increase.
• Social insurance The effects of China’s aging population are
already being seen. People aged 60 and above
Eldercare and childcare service providers that account for at least one-fifth of the population
have been hit by COVID-19-related difficulties in 13 of China’s 31 provincial-level regions. The
can apply for a phased deferral of pension problem is particularly acute in the north, where
insurance, unemployment insurance, and work- young people are leaving in favor of areas with
related injury insurance payments. Eligible better job opportunities.
service providers can also apply for deferred
payments of employee medical insurance for up Overall, 18.9 percent of China’s population
to three months with no late payment fee. was over age 60 in 2021. Meanwhile, the birth
rate fell by 11.5 percent compared to 2020.
Moreover, employees in the eldercare and Because of China’s demographic crunch, the
childcare industry who individually join the government seeks to increase the accessibility
pension insurance scheme by themselves can of eldercare and childcare to tend to the
postpone their payments until the end of 2023 if country’s aging population and ease the costs
they have difficulties in paying social insurance of raising children.
premiums. In addition, the measures direct
local governments to continue to implement Besides the supportive policies to assist
the policy of reducing unemployment and work- eldercare and childcare service providers
related injury insurance premiums. amid COVID-19, the government has released
numerous policies to strengthen these
• Financial support industries in recent years. These include,
among others, a Five Year Plan for the
The measures include several provisions eldercare industry released earlier this year
designed to increase access to financing. These and the recent introduction of childcare leave.
include directions to local governments to carry As such, government support for eldercare and
out and deepen the pilot program of relending childcare stands to extend beyond short-term
for inclusive eldercare, and to support financial policy support in the face of COVID-19.
institutions in providing loans to inclusive
eldercare service providers.
5 AMCHAM SOUTH CHINA
to offer other means of financial support, such
・The income obtained from providing as by subsidizing loans, providing financing
community eldercare, childcare, and domestic credit enhancement support, and providing
service shall be exempted from VAT. liability insurance support.
・The income derived from providing community Why eldercare and childcare are
eldercare, childcare, and domestic service shall be
included in the total income by 90 percent when important for China
calculating the taxable income amount.
Assisting the eldercare and childcare industries
・Exemption from deed tax for housing and land is a priority for the Chinese government not just
used to provide community eldercare, childcare, because they have been negatively impacted by
and domestic service. COVID-19, but also because of their
social importance.
The electricity, water, gas, and heat used by
eldercare and childcare institutions shall be at China is one of the world’s most rapidly aging
the rate for residential use, rather than the rate countries, and new childbirths continually lag
for commercial or industrial use. behind the government’s goals. As a result of
The residential usage rate is much lower. The China’s skewed demographics, its working-
measures also call on local governments to age population will soon decline rapidly while
implement further incentives for eldercare and the proportion of its dependent population –
childcare service providers. comprised of children and seniors – will increase.
• Social insurance The effects of China’s aging population are
already being seen. People aged 60 and above
Eldercare and childcare service providers that account for at least one-fifth of the population
have been hit by COVID-19-related difficulties in 13 of China’s 31 provincial-level regions. The
can apply for a phased deferral of pension problem is particularly acute in the north, where
insurance, unemployment insurance, and work- young people are leaving in favor of areas with
related injury insurance payments. Eligible better job opportunities.
service providers can also apply for deferred
payments of employee medical insurance for up Overall, 18.9 percent of China’s population
to three months with no late payment fee. was over age 60 in 2021. Meanwhile, the birth
rate fell by 11.5 percent compared to 2020.
Moreover, employees in the eldercare and Because of China’s demographic crunch, the
childcare industry who individually join the government seeks to increase the accessibility
pension insurance scheme by themselves can of eldercare and childcare to tend to the
postpone their payments until the end of 2023 if country’s aging population and ease the costs
they have difficulties in paying social insurance of raising children.
premiums. In addition, the measures direct
local governments to continue to implement Besides the supportive policies to assist
the policy of reducing unemployment and work- eldercare and childcare service providers
related injury insurance premiums. amid COVID-19, the government has released
numerous policies to strengthen these
• Financial support industries in recent years. These include,
among others, a Five Year Plan for the
The measures include several provisions eldercare industry released earlier this year
designed to increase access to financing. These and the recent introduction of childcare leave.
include directions to local governments to carry As such, government support for eldercare and
out and deepen the pilot program of relending childcare stands to extend beyond short-term
for inclusive eldercare, and to support financial policy support in the face of COVID-19.
institutions in providing loans to inclusive
eldercare service providers.
5 AMCHAM SOUTH CHINA
