Beijing(CNN) Li Chao's life changed forever the evening he returned home from a late night at the office and found his beloved husky JoJo dead on the floor.

He was devastated. JoJo had been both his child and his best friend rolled into one. To make matters worse, Li soon discovered that he couldn't find a funeral home good enough for JoJo.

So, he decided to start his own. Now, Li is part of China's booming, multibillion-dollar pet industry.

There are no publicly available government statistics on how many dogs, cats or other pets now live in Beijing or other parts of the country.

But according to the Pet Industry White Paper, published by Pet Fair Asia and Doumin.com, the number of cats and dogs in China jumped by more than 8% in 2019 to just under 100 million.

Joypets Funeral Home founder Li Chao holds one of his dogs at his workplace in Beijing in October.

The surge in pet ownership is largely due to China's growing wealth, and the ability of citizens to spend their money on things that bring them joy.

But there's a darker side to the trend. Almost one in five pet owners surveyed in the Pet Industry report said they had bought a pet for the mental support -- a rise of almost 20% compared to the previous year.

According to the Chinese government, depression and anxiety rates are rising across the country.

Li said, to him, JoJo was not just a dog -- he was a source of support and love in a city where he has no family.

"Many people who live in Beijing are not Beijingers. Most of them are young people who just work here. They are far away from their hometowns, they don't have family around," said Li.

"People need company when they are working hard here."

Some of the pets for whom Li and Joypets have performed services over the past four years in Beijing.

Billion-dollar pets

Like many things in China, the Communist Party tightly controls the ownership of pets.

Before 1994, owning dogs was strictly prohibited in Beijing as it was seen as an indulgent "bourgeois pastime." But over recent decades the rules have slowly relaxed.

Now the Pet Industry report estimates there are over 73 million pet owners across the country as whole, and the industry that services their cats and dogs alone is worth a staggering $28 billion (202 billion yuan).

A significant slice of that industry is located in the capital. "In the past three years, the number of new pet stores in Beijing has grown by 60% ... (Now) there are many types of pet services, such as pet grooming, pet care, pet hotels, pet parks, pet photography, pet funeral, and so on," said Lily Tian, the editor of the Pet Industry report.

Nothing is too good for Beijing's beloved cats and dogs. In the capital's best pet hotels, four-legged guests are provided with in-house gardens and spas with distilled water in their rooms.

High-end pet hairdressers and photography services are springing up, making Beijing's animals picture-perfect for Instagram or family portraits.

Zhao Siyu, manager of the Catsvilla cat hotel in Beijing, said it is "unbelievable" how much money people spend on their pets. "The industry is doing better and better .... As long as the cost is within your means, everyone would love to spend more money on their cats," she said.

A dressed-up dog is seen during Pet Fair Asia 2019 at Shanghai New International Expo Centre (SNIEC) on August 21 in Shanghai, China.

Catsvilla was first established when Zhao's boss, owner Gina Guo, couldn't find a pet hotel to cater to her cats. She started her own personal hotel which slowly became a business.

Professional designers created each of the rooms, installing areas to play, a fish tank, easily accessible shelves and a private toilet.

"When you're attached to (pets), you would love to spend money on them," Zhao said.

When their pets eventually die, some devastated owners pay more than $1,000 to properly send off their companions, according to Chinese state-run media.

Four years after he started the Joypets Funeral Home, Li said he is holding around three funerals a week for pet owners, similarly devastated by the loss of their beloved animals.

He offers two separate funeral services -- a more traditional Chinese Buddhist commemoration and a secular farewell for atheist or agnostic owners. Afterwards, Li will help them choose how to dispose of their pet's remains, with cremation generally the preferred option.

Li said he doesn't make much money from his service, but he does it because he thinks it's important for people to be able to say goodbye.

Mental health crisis

Catsvilla owner Guo and funeral director Li were both one of the thousands of Chinese people who have turned to animals for support.

Long before Guo opened the lavish cat hotel, she was suffering from severe depression, even needing medication to sleep properly, she told CNN.

It was Guo's cats which had helped to pull her out of her depression. "Now her emotions are more stable," her employee Zhao said.

Worldwide, studies have shown that animals are an effective way to lower stress and anxiety. And the Chinese government says mental health problems are on the rise across the country.

In a official report released in July, Beijing's Commission on Health said that tens of millions of people across the country were suffering from depression and anxiety.

"At the same time, the public's knowledge and recognition on mental disorder and mental health is low. They are lacking in prevention measures and the initiative to seek help," the report said.

CatsVilla manager Zhao Siyu and her pet ragdoll cat in front of some of the specially-designed hotel rooms in Beijing.

Under its Healthy China Initiative, the Chinese government is rolling out a mental health awareness campaign and expanding counseling services. It's part of a plan to improve health rates by 2030.

Government intervention may also be partly responsible for the rise in pet ownership. Decades of Beijing suppressing the country's birth rate through the one-child policy has created lonely elderly parents and a generation without siblings.

"(As) the fertility rate of China's population has declined, and only children and seniors are living alone, they have a need for companionship and emotional support," said Zhao.

Li is glad to do his part. At his funeral home, he has a wall covered in photos of pets whose owners have come to him for help.

In a room at the back, Li has a special place to store some of their ashes in alcoves, along with perhaps a favorite toy, blanket or some snacks.

"People's attitude towards pets changed hugely. In the past, they may be seen as a kind of tool that helps you to do something ... But now, people are more willing to treat them as a human, or a friend," he said.

"They play roles in people's life. They give us unconditional love."