An old man stands in front of a residential building in Anyang, Henan Province, on September 16. Photos: CFP

Guo Minghua, 87, and his wife, Wu Qinsheng, 81, have led a fairly relaxed life since they moved to a nursing home in Chongqing in July.

Unlike many parents in China who choose to leave their houses to their children, the couple sold their only house in June to pay for their stay in a nursing home.

Their son told the Chongqing Evening News that he supported his parents' decision as long as they feel happy. "I've been liberated from housework and have more friends now," Wu said.

The views of the couple are not like many other elderly citizens in China. "Chinese people traditionally like living with their children in their own house at the end of their lives. But from my point of view, a house can't be moved but humans can move around. Why shouldn't people live comfortably?" asked the couple.

Their choice is in line with a new policy issued by the State Council on September 13, which suggested reverse mortgages as one of the solutions available for elderly homeowners to support their final years. Although the scheme is popular in some Western countries including the US and France, it has often been met with suspicion in China.

Although it was first suggested about 10 years ago and has been tried in some areas, few have run it successfully.

History of resistance

Meng Xiaosu, a director with the China National Real Estate Development Croup Corporation, was the first to suggest introducing the scheme to China in 2003, the China Economic Weekly reported Tuesday.

But the plan stalled as there were no laws available to protect the relevant property rights until 2007, when the formal Property Law came into being. Another reason was that rumors quickly spread indicating that housing prices would decline, Meng said. 

"These problems have been solved due to improvements to relevant laws, rising housing prices nationwide and the rapid growth of China's elderly population in recent years," Meng told the Weekly.

By 2012, China's population aged 60 and above was 194 million, accounting for 14.3 percent of the total population and that number is expected to hit 200 million this year, according to statistics released by the Ministry of Civil Affairs on September 20.

Despite the heavy pressure caused by the elderly population, many Chinese are less than enthusiastic about the scheme.

According to a survey conducted by the Youth Daily last week, 85 percent of 127,815 respondents said they would leave their houses to their children and only 8.8 percent said they were willing to mortgage their houses to financial institutions.

"Chinese society stresses relationships between family members. Parents usually pass down their houses, the biggest property of a family, to their children. In return, they expect their children to support them in their senior years," Xia Xueluan, a sociologist from Peking University, told the Global Times on Wednesday. "It's difficult to change the attitudes of the elderly."

Failed experiments

Several cities like Beijing, Shanghai, and Nanjing have tried similar schemes in recent years. In 2007, ZD House, a Beijing-based housing agency, cooperated with nursing homes in Beijing to research aged-care services. Under the plan, the elderly signed contracts with the agency to rent their houses, and the rent would be given to the nursing homes supporting the elderly.

But the pilot was halted after several outlets in Beijing attempted it for six months. According to Bo Ying, a manager at the company, fewer than 10 people signed up, the Beijing News reported Monday.

"The main reason for the failure was that the elderly people firmly resisted the project," Bo told Beijing News.

The elderly were not willing to rent their houses to strangers and wanted the tenants to keep the houses exactly the same, which conflicted with the goals of renters. As a result, the maintenance costs increased for the agency and it could not make a profit, said Bo.

Despite government support, some aged-care agencies also failed at similar projects.

In 2007, the Shanghai Housing Prudent Fund Management Center, which was sponsored by the local government, issued a policy allowing people above 65 to sell their houses to the center.

This allowed them to receive a lump sum, and the center then rented the houses back to them. The plan was suspended in 2010 and the center said there was no timetable to reinstate the plan.

The failure of the plan was because most of the elderly involved could not accept the idea that they no longer owned their properties, Wang Rongming, a professor with the School of Finance and Statistics at East China Normal University in Shanghai told the Beijing News.

"Real estate for Chinese is a commodity that can appreciate and  help them ensure a steady life and that's why they use the money they have saved over their entire lives to buy it, " Zhang Dawei, a research fellow at the Beijing office of Centaline China Real Estate, told the Global Times Wednesday. "That's why they focus on it so much."

Policies needed

Currently, properties in China can only be leased for 70 years, and there are no clear policies regarding what happens when the term expires.

"That causes great risks for banks and insurance companies who take over the houses, which only have 20 or 30 years remaining," Su Fang, head of the finance and insurance institution at the Shanghai University of Finance and Economics, told the Global Times on Wednesday.

The scheme demands a series of policies to provide support, such as elaborating upon what kinds of institutions can get involved as well as relevant laws to deal with conflicts, Su said.

"The scheme won't need another 10 years," said Meng. "Many people have consulted me on the behalf of their parents and that is a positive sign."

In fact, many elderly people resist the proposal as they are afraid that the government will pass the burden of taking care of the elderly to senior citizens.

"The government is just offering another choice to improve the elderly's quality of life," said Zheng Gongcheng, a professor from the Renmin University of China.

"Though there is great pressure on pension funds due to the aging population, such a proposal would never replace the current government-led pension scheme," he said, adding that it should be regarded as just another insurance product on the market