Fraudsters prey on the fears of China’s aging population.

Shady retirement home and investment schemes have cheated China’s rapidly aging population out of hundreds of millions of dollars, spurring more than a thousand criminal cases in recent years.

In a society that traditionally relied on family members to take care of elderly parents, fraudsters have been able to prey on fears that changing social norms and scarce resources will leave older people bereft, report Alexandra Stevenson and Cao Li for The New York Times.

By 2025, more than 300 million people in China will be 60 or older, according to the Chinese government. By 2050, that number is estimated to rise to half a billion.

China’s now-defunct one child policy and mass migration to big cities, though, mean that there are fewer people to care for this large and vulnerable group. The government provides care only to those with no family, no financial support and no ability to work.

In Yiyang, a retired handyman was so distraught after being swindled that he threw himself into a river last month and drowned, according to state media.

“We have a continuously aging population, and government-funded public services are not enough to look after this population,” said Dong Keyong, a professor at the School of Public Administration and Policy at Renmin University of China in Beijing.

The government has been relying on private sector companies to step in, offering subsidies and tax benefits as encouragement. But the cost of building a nursing home is high, and the rewards are often too low because most people cannot afford high-quality care.

The result has been that some builders have skirted laws that forbid them to accept money from residents before the retirement homes are built by creating side investment products that promise high interest rates and future membership benefits.

One company, Shanghai Da Ai Cheng, raised more than $150 million promising returns of up to 25 percent and a retirement home. Three years after the program started, the project collapsed and more than $81 million had disappeared.

Source: Read Full Article