Dayingmencun Village lies in the suburbs of Hami City. In the 1990s the city began to expand and now more than two thirds of the arable land has been occupied. Although the government has increased compensation for land expropriation, most farmers barely have enough savings for their retirement.

Cui's real estate company develops land in the village. All the 108 shareholders of the company, including Cui, are residents of the village. To reward the villagers, Cui established the Yingfeng Seniors' Fund. The company contributes 5 percent of its annual profit and the usage rights of 30 shops to the fund.

However, few villages in China have seniors' funds like Dayingmencun Village. Privately provided social security systems have only been experimented with in some areas, so levels of security for social security are patchy across China.

In 2004, the Chinese Government introduced a social security system to rural areas. Under the system, the annual contribution for each individual was 200 yuan, which was to be matched by the government, but the system was aborted.

"Back then, farmers did not understand the importance of social security and were unwilling to participate in the program. This led to the failure of the program," Yuan from the CNCA explained. He confirmed that building a social security system in rural areas is now back on the government's agenda.

"Different from the previous program, this social security system is coordinated by the government but operated under a market model. The public will feel real benefits," said Yuan.

Outsourced elderly care

Right now, China is developing new models for elderly care that combine home care with community care. Such programs have been piloted in some places.

In Gulou District, Nanjing City of Jiangsu Province, the local government has outsourced elderly care to local communities, according to Yuan. Companies in the community winning a bid will provide home care to the seniors. The service will be evaluated primarily by senior citizens, and also by the government and the company. The government will pay the company delivering the services directly based on the combined evaluation result.

According to Yuan, China has a total of 1.59 million beds in nursing homes, which can only meet four percent of the demand. The occupancy rate in many elderly care centers is very low, while other centers are overcrowded. For instance, the Beijing First Social Welfare Institution has only 540 beds, while more than 1,000 seniors are on its waiting list.

"The government should strike a balance between social service and the market, and should give incentives to the private sector," Yuan said.

Statistics At the end of the 20th century, the proportion of people over 60 in China accounted for more than 10 percent of the total population. By international standards, China had become an aging society. At the end of 2005, more than 144 million people in China were over 60 years old, accounting for 11 percent of the total population. The proportion of people above the age of 60 is growing at an annual rate of 3 percent. A forecast from the China Population Information and Research Center says that by 2020, 16.6 percent of the population will be older than 60, while in 2050, the proportion will reach 28.76 percent. In 2005, the ratio of worker to retiree was 6.2 to 1; while in 2020 the ratio will fall to 3.7 to 1. In 2005, there were about 39,546 elderly care providers in China. On average, every grassroots urban community has 1.31 such providers. In the countryside, the New Rural Cooperative Medical System covered 495 million rural population and 73 percent of the rural elderly were in the system. To meet the challenge of elderly care in China, where well over 100 million people are above 60 years old, the government will speed up the construction of a social security system covering both urban and rural areas