Private nursing homes will play a major role in serving the graying society in Beijing, according to Li Hongbing, the capital's deputy director of civil affairs.

Demand for senior citizen care at State-run nursing homes far exceeds supply while private nursing homes in Beijing often have vacancies.

This has given rise to calls for an increase in the number of nursing homes operated by the government.

However, Li said the key lies in service quality provided to the elderly rather than who actually runs the homes.

"The issue with the city's graying society does not lie in the operator of the nursing institutions, but the quality of the service provided," Li said.

"Many nursing institutions run by the private sector are well received and offer considerate and thoughtful services, while some operated by the government also have hundreds of empty beds."

With massive investment in land, personnel and operations, State-run nursing homes can be run efficiently and at low cost without the overheads faced by private homes which often face huge financial pressure.

Very few private nursing homes manage to reach a 3 to 8 percent profit on revenue, a normal standard worldwide, Li said.

"Some even went bankrupt."

Li said State-run nursing homes, like Beijing First Social Benefit Institute, which provides quality services at a reasonable price, were products of the planned economy of the past, and could not be duplicated across the capital despite their popularity.

"These nursing institutes used to serve the minority, yet the explosive aging population requires organizations to come up with services targeting a growing number and they require the participation of social capital and initiative," he said.

"However, the key lies in enriching the variety of services and improving the quality, rather than expanding the scale of State-run nursing homes."

The government will further come up with more compensation for private nursing homes, including tax breaks and land preferential policies, he said.

Li also said foreign capital is welcome.

"Many developed countries have gone through similar experiences like Beijing, and it's necessary for the capital to draw lessons from them and better prepare itself for the increasingly aging population."

He suggested that insurance companies should also come up with various insurance products aimed at the aged.

"Compared to insurance products and policies for the aged provided abroad, Beijing still has a long way to go," he said.

Beijing is witnessing a trend in that many nursing homes are attaching more focus on the spiritual life of the aged, including providing psychological counseling and organizing concerts and other entertainment activities.

"The future will see a rich mixture of personalized service for the aged, but it's going to take some decades," he said.