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The Demographics of Dating in China

Yesterday, Dennis Gartman wrote a few words we’d like to repeat. (Yes, we know we quote him a lot in this blog, but the man does good work). Gartman said,

“Long time readers of [the Gartman Letter] know that we believe demographics drive everything. Demographic trends…trump taxation; they trump economics; they trump politics on the Left and on the Right. Simply put, demographics are triumphant, and yet few pay any heed to these tidal circumstances that colour all things else”

He then goes on to quote some established demographic stats that we ourselves have used in various other writings, specifically those relating to the gender imbalance in China due to the One Child Policy. Coincidentally, The Wall Street Journal had an interesting piece this morning covering the same topic: “It’s Cold Cash, Not Cold Feet, Motivating Runaway Brides in China.”

Desperate to find marriage partners, many young Chinese men are being duped by a new generation of opportunistic female con artists. The Journal reports several cases of attractive young women visiting rural villages ostensibly looking for husbands. Overjoyed by their seemingly good luck to find available women at all, the grooms and their families are all too happy to oblige. After dowries are paid — sometimes amounting to a small fortune for rural Chinese farmers — the women disappear in the dead of night…moving on to the next village.

Because of family planning and selective abortions of female fetuses, the One Child Policy has created an imbalance that is hard to fathom. There are 32 million young Chinese men — roughly the size of Canada’s entire population, as the Journal points out — with no prospects for marriage or family and the stability that they bring.

The Journal also points out that this is a contributing factor to China’s extremely high savings rate. As the “price” of women rises, Chinese men have to increasingly forgo consumption and save ever more of their modest incomes to pay for the dowry. Areas with the highest male/female ratios have the highest savings rates in the country, not coincidentally.

One might think that a shortage of marriage-aged women would enhance the status of women and lead to a Chinese “women’s lib” movement of sorts. This is what international investor Jim Rogers (of Investment Biker and Adventure Capitalist fame) forecasted as far back as 2003. In practice, quite the opposite seems to be the case. Women in rural China have simply become commodities that sell to the highest dowry “bidder.”

As for the men, many China commentators have postulated what the effects of a surplus of men might have on Chinese society. The fear has been that 32 million wife-less men might turn the country into something resembling a violent, lawless Wild West town, or at best a rowdy frat house.

More seriously, there is speculation that China might become increasingly militaristic and expansionist. After all, what better way to get rid of surplus men than to send them off to foreign wars?

Jim Rogers takes the opposite view: that a nation of only children will be spoiled and somewhat soft — not exactly soldier material. Chinese parents would not want to risk the lives of their only sons, after all. Gartman takes the same view in yesterday’s Gartman Letter, saying that young men might become a “protected species” that Chinese elders will not want to put at risk.

It remains to be seen which scenario — or perhaps what mixture of the two — comes to pass, but we can be certain that China’s gender demographics will be a major issue in China’s development in the decades to come.

Charles Sizemore, CFA

Co-Author of the recently-published Boom or Bust: Understanding and Profiting from a Changing Consumer Economy