China’s one-child policy and runaway brides
Partly due to the one child policy, China now has one of the highest male-to-female ratios in the world. When these men reach marriageable age, nowhere in the world they could find a bride.
In a highly competitive marriage market where women are in hot pursuit, and with potential of huge ‘profits’, scam naturally rises. Here is some interesting excerpts from WSJ’s article on China’s runaway brides.
Ten days later, Cai Niucuo vanished, leaving behind her clothes and identity papers. She did not, however, leave behind her bride price: 38,000 yuan, or about $5,500, which Mr. Zhou and his family had scrimped and borrowed to put together.
When Mr. Zhou reported his missing spouse to authorities, he found his situation wasn’t unique. In the first two months of this year, Hanzhong town saw a record number of scams designed to extract high bride prices in a region with an oversupply of bachelors.
The fleeing Mrs. Zhou was one of 11 runaway brides — hardly the isolated case or two that the town had seen in years past. The local phenomenon has fueled broader speculation among officials that the fast-footed wives may be part of a larger criminal ring.
“She called me soon after she left,” says Mr. Zhou, a slight man with a tentative smile. He says she asked how he was doing, and apologized for the hardship she had caused. “I told her, ‘I will see you again one day.’ “
Thanks to its 30-year-old population-planning policy and customary preference for boys, China has one of the largest male-to-female ratios in the world. Using data from the 2005 China census — the most recent — a study published in last month’s British Journal of Medicine estimates there was a surplus of 32 million males under the age of 20 at the time the census was taken. That’s roughly the size of Canada’s population.
Now some of these men have reached marriageable age, resulting in intense competition for spouses, especially in rural areas. It also appears to have caused a sharp spike in bride prices and betrothal gifts. The higher prices are even found in big cities such as Tianjin.
A study by Columbia University economist Shang-Jin Wei found that some areas in China with a high proportion of males have an above-average savings rate, even after accounting for factors such as education levels, income and life-expectancy rates. Areas with more men than women, the study notes, also have low spending rates — suggesting that many rural Chinese may be saving up for bride prices.
How easy money feuled another round of commmodities speculation
With oil inventories high and demand down year on year, yet prices surging, “fundamentalists” are puzzled. Market participants, however, always have an eye on the future and locking in a profit.
Recently, commodities bulls have been aided by the Federal Reserve keeping rates low and banks’ short-term funding flowing. This facilitates commodities trading and stokes fears of inflation. As cash flows into oil futures, their prices rise relative to spot prices. That makes it profitable to buy physical oil, store it and sell it forward.
Energy economist Phil Verleger demonstrates how lucrative this can be. On March 1, the cash price of light, sweet crude was $40.15 a barrel, while the 12-month forward contract sold for $50.26. Assume an investor bought the physical barrel borrowing 80% of the money at a rate of 3%, sold it forward, and paid 50 cents a month for storage. The resulting profit of $3.15 a barrel equates to a 39% return on investment.
![[crude oil chart]](https://s.wsj.net/public/resources/images/MI-AX103_CHINAH_NS_20090605173937.gif)
In reality, financing and storage costs aren’t static. As spot prices have risen faster than futures, the spread has narrowed and the volatile trade recently turned unprofitable: On Friday, the return was zero.
Rapid liquidation of inventories could crash prices. Financial-services provider GaveKal puts global commercial inventories at six billion barrels. Crudely calculated, that is more than $400 billion of precious working capital tied up.
Yet oil has held up. Inflation fears aside, the “green shoots” thesis also lends support, although this is self-reinforcing: The more optimism on the economy, the more oil prices rise, fueling more optimism. On that reading, last July’s $145 a barrel should have betokened eternal prosperity.
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