As the aging process continues and the the economy keeps booming in China，the elderly care industry has made a significant progress with the promotion coming from the government and the market. This report aims at reviewing the current status of the elderly care institutions in China as well as identifying existing problems and proposing suggestions. The data of the China Civil Affairs Statistical Yearbook and the data of the fourth survey of the living status of elderly in urban and rural areas were used to analyze the needed number of the bed in the elderly care institutions as well as the needed types of services. The development status and service characteristics in different types of elderly care institutions were reviewed to identify the challenges. Firstly，a certain gap exists between the functions of the elderly care institutions and the actual needs of the elderly. The elderly care institutions should be developed on the basis of scientific assessment of needs of the senile population. Secondly，the elderly care institutions which could provide professional medical care are inadequate. It is necessary to adjust the structure of the service provision. Thirdly，the professional nursing staff in the elderly institutions is in short supply，and the training of the elderly nursing specialists should be strengthened. Finally，the private care institutions are facing more difficulties so policies to move the unnecessary obstacles should be considered.