Changing China

from MacroScope:

Spend Save Man Woman

Far from being lauded as a virtue, China's high savings rate has been blamed for the economic imbalances underlying the global financial crisis. The criticism being that the Chinese spend too little and rely too much on exporting to Western consumers.

The IMF and World Bank have long called for Beijing to ramp up social spending so its citizens will feel less need to save for a rainy day and instead consume more.

But in their intriguingly named paper,  'A Sexually Unbalanced Model of Current Account Imbalances', New York-based researchers Du Qingyuan and Wei Shang-Jin suggest China's gender imbalance could also be a significant factor in the persistence of its high savings rate.

The pair argue that intensifying competition in the Chinese marriage market is causing men -- or indeed parents with sons -- to raise their savings rates to improve their relative allure among a shrinking pool of potential brides.

A draconian one-child policy, coupled with a traditional preference for male offspring and the availability of selective-sex abortion, has left the country of 1.3 billion facing its most serious demographic crisis.

An estimated 119 boys are born per 100 girls and the Chinese Academy of Social Sciences has warned that this could leave more than 24 million Chinese men of marrying age without spouses by 2020.

This anxiety over the worsening marriage prospects for men could explain why Chinese household savings as a share of disposable income has risen from 16 percent in 1990 to 30 percent in 2007.

from Global Investing:

Another nail in the Malthusian coffin?

All the talk of addressing the global imbalances throws a spotlight on contrasting demographic trends in the world's two most populous nations -- China and India.

Prior to the financial crisis, India's annual growth rate of about 9 percent seemed positively moribund next to China's double-digit economic expansion. But purely on demographics, the dimming power of the US consumer could give India an edge over its neighbour in the longer run.

That's what India's trade minister Anand Sharma seemed to suggest last week when he reminded the audience at a London conference that the country had "20 percent of the world's children":

We know that when we talk about emerging countries the consumption patterns are different. Most of China's production is meant for (markets) abroad. India consumes two-thirds of what India produces.

Indeed, Goldman Sachs projects that India's middle class will outstrip China's by 2045. This is some 15 years after half of China's population becomes either too old or too young to be part of the workforce.

Beijing's mandarins are taking note of this monumental shift in dependency ratios. After decades of enforcing a 'one-child' policy in the face of an human rights outcry, China appears to be relaxing its stance on population control. Family-planning officials in Shanghai have begun to urge eligible couples to have two children.

Taiwan’s killer mudslides

After Taiwan’s worst storm in 50 years killed hundreds in massive mudslides last month, the government blamed the freak weather while survivors said the government’s slow response after the Aug. 7-9 storm made matters even worse.

Only recently, with reconstruction under way, have officials in the six-county disaster area begun asking what contributing factors may have caused the steep mountainsides to give way, hurling boulders and walls of mud onto riverside villages below. Nearly 770 people are presumed to have died, most of them buried alive.

In the absence of any official declaration of the underlying causes, residents have filled the void with speculation.

Will Bahamas top medals table again?

There’s an interesting graphic at moreintelligentlife.com showing the medals table at the last Olympics in Athens, adjusted for each country’s population.

The Bahamas are top with Australia second and Cuba third, according to the site’s calculations. Australia were fourth in the unadjusted table, which I guess just highlights their extraordinary performances at the highest level in sport.

It’s early days here in Beijing, where China lead the ”real” medals table with two golds from three events. The big surprise there is that it’s not a 100 percent record. Du Li had been a strong favourite to repeat her success of Athens and win the opening gold of the Games in the 10m air rifle.

In the end, it seemed, the pressure was too great. You can get updates, and see all of our coverage of the Games, by clicking here.