Overseas funds are encouraged to take part in the development of rest homes for the elderly in Guangzhou, the capital of Guangdong province, said a local civil affairs official.

Zhuang Yuequn, director of the city's civil affairs authority, said at the annual session of the local legislature that a pilot project involving overseas-invested rest homes for the aged will soon be carried out in the city's Nansha district.

"Services for the elderly will be a promising industry. Overseas investment, especially from Hong Kong and Macao, will be welcomed as the two special administrative regions have developed a very sound system in this regard," Zhuang said.

According to Zhuang, around 10,000 beds will be made available this year for the aged, of which 4,000 will be provided by private rest homes.

"We will support the development of more private nursing homes as the city has registered a growing population of elderly people," Zhuang said.

According to Zhuang, Guangzhou has around 1.25 million people over 60 years old, accounting for nearly 15 percent of the city's population.

The number of seniors will reach 1.4 million by 2015, sources with the local civil affairs authority said.

"Government-funded rest homes cannot meet the rising nursing demand," Zhuang said.

According to Zhuang, the number of beds in the city for the elderly will be increased from 34,000 now to 56,000 in 2015.

"It means that there is huge business potential for the construction of rest homes," he said.

Hong Kong investors are keen on building rest homes in Guangzhou's neighboring cities including Dongguan, Shenzhen and Foshan.

"We don't have one rest home built by Hong Kong investors. But we hope the potential market will attract investment from the special administrative region," Zhuang said.

Also, a growing number of seniors from Hong Kong have moved to the Pearl River Delta region after retirement in recent years due to less expensive nursing fees.