How lonely single men created China's dangerous real estate bubble.
For more photos of Beijing’s housing bubble, click here.
BEIJING — When Xiaobo Zhang got married in the early 1990s, he and his bride, like millions of other couples across China, were given a small room to live in by his danwei, or work unit. At the time a lecturer at Nankai University in Tianjin, Zhang’s room was utilitarian and unremarkable, virtually indistinguishable from the ones inhabited by his colleagues. In a word: average.
In the China of the 1990s, which was characterized by a pubescent limbo between the economic reforms of the 1980s and the last decade’s explosive growth, Zhang recalls that mostly everyone was average. People were neatly packed into work units, generally laboring under the same conditions, eating in the same canteens, and sleeping in the same blocks of industrial-looking housing provided by their employers. There was little disparity in salaries, and few cars and luxury handbags to spend those salaries on.
During these times, Zhang explained, occupants paid minimal rent for their work-unit housing — which was issued based on seniority, family size, and rank — and could essentially stay in it forever. There was no legal market for buying and selling property in China, even in rural areas without employer-provided housing, where families built their own homes. Then, in 1998, the Chinese real estate market was born. It began with a decision by the Chinese State Council to monetize housing in an attempt to develop a commercial private market for real estate. In other words, instead of just providing apartments for lifetime occupancy, companies, nonprofit organizations, and government agencies began to give their employees the option to purchase the housing they lived in. Fourteen years and a serious housing construction boom later, China’s property market has allowed for one of the world’s largest accumulations of real estate wealth in history, valued at $17 trillion in mid-2010 by HSBC Global Research and worth some 3.27 times China’s GDP. (To better understand the scope of the construction boom that precipitated this massive accumulation of wealth, it’s worth noting that between 1998 and 2008 alone, 14.4 billion square meters of residential housing space were constructed in China, according to China Statistical Yearbook figures. That’s equivalent to 160 times all the residential space on the entire island of Manhattan.)
This is where the definition of "average" in China starts to go a little wonky.
As a result of the real estate boom, reports in Chinese media indicate that the average property in a top-tier Chinese city now costs between 15 and 20 times the average annual salary, though J.P. Morgan reports indicate something closer to 13. (For purposes of comparison, in most of the world’s cities, the housing-cost-to-income ratio hovers between 3-to-1 and 6-to-1, rounding out at about 3-to-1 in the United States.) This is especially problematic in China, where thanks to still-prevalent Confucian ideals of the male as the "provider," home ownership has become an unspoken prerequisite to marriage.
It’s a tough, competitive life for men in China these days, in part due to the aftershocks of the one-child policy, which has left the country with a gaping gender imbalance of 120 boys for every 100 girls. Author Mara Hvistendahl reports in her book, Unnatural Selection: Choosing Boys Over Girls, and the Consequences of a World Full of Men, that by late 2020, 15 percent (or roughly one in six) Chinese men of marriageable age will be unable to find a bride. She predicts that China will see an increase in what’s already happening in Taiwan and South Korea, where men doomed to bachelorhood as a result of gender imbalance are boarding planes to Vietnam. Roughly $10,000 covers their flight, room and board, and the price of a Vietnamese wife, according to Hvistendahl, and this practice has become so common that the imported wives "get a booklet translated into Vietnamese explaining their rights when they get married at the Taiwanese Consulate."
Although instances of bride-buying and bride-napping are often reported in China, men are also turning to the web in the face of increasingly heavy competition to attract a mate. On China’s mega microblogging website, Sina Weibo, a page called "Save a Single Police Officer" was created by the deputy director of a police station in Sichuan province to help his employees find a spouse. He feared that given the gender imbalance and the grueling work hours of his men, they would become guang gun, or "bare branches," a term usually used to describe men in China who cannot find a wife.
The page launched this February with the profiles of five police officers, including a strapping young man with a gun who goes by the name of "Cola427." Offering a mix of local news, weather reports, and the profiles of single officers (including some female ones) who have been added to the mix, the page now has more than 55,000 followers. This July, a post encouraged all citizens to rejoice because Cola427 (with over 6,000 followers of his own), age 29, measuring in at 1.78 meters and 70 kilos, had found the love of his life through the site.
Millions of other Chinese men are not so lucky. While the most disadvantaged are the country’s poor male farmers, who now live at society’s rock bottom in rural villages devoid of women their age (as females tend to leave in search of better jobs and marriage prospects), the marriage challenge is rippling its way up through the classes. It is manifested most clearly in China’s real estate market, where — given the highly desirable nature of property — men are pouring all their savings as a means of improving their chances of finding Mrs. Right, or any Mrs. for that matter.
"Mathematically, they can’t get married," says Zhang, referring to younger Chinese men and their double burden of financial demands and the shortage of available women to marry. In 1994, he moved out of his danwei to study for a Ph.D. at Cornell University in the United States. Today, he works as a senior research fellow at the International Food Policy Research Institute in Washington and as a professor at Peking University. Along with Columbia University economist Shang-Jin Wei, he has published several studies on China’s economic growth, including one that shows how 30 to 48 percent (or $8 trillion worth) of the real estate appreciation in 35 major Chinese cities is directly correlated with China’s sex-ratio imbalance and a man’s need to acquire wealth (property) in order to attract a wife.
"Mother-in-law syndrome" — the idea that Chinese mothers-in-law are driving up the price of real estate by refusing to allow their daughters to marry men who are not homeowners — has been widely reported in China, but Zhang and Wei take things a step further. They show how Chinese cities with the highest ratio of men to women are also consistently the ones with the highest percentages of real estate appreciation, which follows the logic that fewer women means more competition among men and a greater need for a flashy house. At the same time, rental prices in these cities have increased minimally by comparison, lending credence to the theory that the rise in real estate prices is not driven by an actual demand for housing, but by the demand to own a house.
This demand has no doubt contributed to fears over China’s housing bubble, which has been the source of concerned speculation now that China’s economic growth has slowed to 7.6 percent, the lowest since 2009. A recent IMF publication shows how a decline in the Chinese real estate market could do everything from affect the price of zinc and nickel to trigger a trade slowdown with South Korea, Japan, and other G-20 partners. Yet from the marriage-market perspective, the demand for property appears unrelenting.
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Berlin Fang, a columnist, literary translator, and associate director at the North Institute for Teaching and Learning at Oklahoma Christian University, argues that the demands of the marriage market and China’s relatively new market economy are so heavy that "Chinese men have lost the ability to be average." Like Zhang, he recalls the days of the danwei with bittersweet nostalgia, as a time when people weren’t so quick to size each other up in terms of their market value. There was a certain comfort and ease to being average, one that has become extinct, given the extreme competition to be one of the "haves." In such a densely populated country, Fang insists that "average is the new mediocre."
The distinction between "average" and "mediocre" is one that has been ticking on the Chinese national psyche, as indicated by one of the questions on last year’s gaokao, China’s notorious college entrance exam:
Please write on the theme of refusing to be mediocre and accepting to be average. People cannot be mediocre. Mediocrity means no creation, no development, no progress. Living in this world, we should not be mediocre. We should have principles, insights, and persistence. Write 800 words in any genre except poetry.
Fang notes that the question was a source of heated debate, as there were concerns that today’s students might not be able to distinguish between "mediocre" and "average." In a country where the social pressure to excel is so acute and mediocrity is rarely an option, Fang agrees that the question is knotty. He suspects it was designed to make students understand that it’s acceptable to be average, so long as it’s an aspirational average, not a feckless one.
Examples of responses that earned perfect scores can be found on Chinese news portal Sina.com, including one that tells the story of Wang Xiaobo. Following a subpar performance at the office, Wang does not receive the bonus he was expecting. When, over a meal of freshly prepared fish, he reveals to his wife that he was denied his bonus, she, "putting down her chopsticks and losing color in her face," laments that she is destined to live a lowly life, having such a good-for-nothing husband. After nursing his woes with a bit of alcohol, Wang hands his life savings over to a shady investment banker and eventually loses everything. Naturally, he heads to a lake to commit suicide, but instead ends up saving a nearby drowning woman. This good deed restores his honor, and he eventually becomes the hardworking, well-earning man whom his wife wants him to be.
While Wang’s story certainly reflects a triumph over mediocrity, the fact that his wife’s well-being is so dependent on his financial performance, and that Wang is so clearly depicted as her provider, reflects how ingrained these ideas remain in modern Chinese society.
Yet because it’s nearly economically impossible for most Chinese men — average or otherwise — to be the providers they aspire to be, they frequently have to rely on their parents for financial support. This is a slippery slope, as it often gives progenitors more control than warranted over their son’s choice of a partner, but Chinese parents — keen to have their sons dutifully snuggled into wedlock — gladly chip in. Zhang and Wei’s study shows how this plays into China’s household savings rate, which at 30 percent is among the world’s highest. They argue that this fact is of particular economic concern, as the high marriage-related savings rate contributes to China’s current account surplus, which in turn drives down China’s exchange rate and perpetuates the global trade imbalance.
"It’s completely unsustainable," says Zhang, arguing that the exact opposite — less saving, more spending — is what China’s economy needs to keep afloat. But because men need to buy homes, they save. And because their demand for homes drives up real estate property, everyone else must save too, in order to keep up.
Seventy-one percent of single women prefer that their future husbands be homeowners, according to the 2010 Marriage Market Survey in China. It is culturally approved — even expected — for a woman to "free-ride" and move into her husband’s house without making any contributions to it, but given the astronomical cost of housing, more women are helping to cover costs too. Doctoral research by Leta Hong Fincher of Tsinghua University focuses on Chinese women who are pitching in, if not shouldering, the joint purchase of a home with their husbands. She points out that this may work to their disadvantage down the road. Due to traditional, yet increasingly improbable, ideals of the man as the sole provider, homes are generally registered under a man’s name. According to Chinese law, property belongs only to the person whose name it is registered under, so in the event of a divorce, women who are not listed as co-owners will lose out on financial contributions to their former marital home. Fincher also cites instances in which young women are hassled by parents into transferring their life’s savings to a bachelor relative, so he can use the money to buy a house and increase his chances of finding a wife. Because it is assumed that a woman will marry into a house, the logic goes that she has a less pressing need for savings of her own.
On the other hand, women who are homeowners before marriage are considered better off, and this can actually improve their chances of "marrying up" into the echelons of moneyed men who have bigger houses than they do. Jeannie Wang, 29, of Beijing, is one of those women. Well-employed at a major auditing firm, she purchased an apartment as an investment and plans to live at home with her parents until marriage. "Ideally, I would like a man to also have a house of his own, or at least the earning potential so that we can buy one together," she says, slightly concerned that having a man move into her house would humiliate him. "I wouldn’t mind so much if I really cared for him, but it’s something I think few Chinese men would go for."
Her case illustrates the double-edged nature of female property ownership in China. Own something, and it might allow you to marry someone with something bigger. Own something too big, and it could intimidate potential suitors.
For men, however, bigger is always better. Zhang recalls visiting villages in China that were bedizened with a "phantom third story." This type of construction refers to a two-story house with an unfurnished, unfinished third story built to make the house appear more grandiose from the outside. The trend has taken off in neighborhoods where the competition for a wife is particularly fierce; in some areas, it has become mainstream to the extent that matchmakers won’t schedule an appointment with a man’s family unless his house has the requisite phantom floor.
On a more recent trip to China, Zhang landed in the southwestern city of Guizhou with a colleague from an Ohio university who was puzzled to find himself in what appeared to be an entire village full of churches. As it turns out, in addition to phantom third stories, owners are competing to add height to their homes by upping the size of the lightning rods on their rooftops. And the bigger they get, the more they look like crosses.
The most alarming thing about these budding basilicas may be that the majority of them remain empty. After they are used to bait prospective wives, the newlyweds often migrate to larger cities. Zhang says this is known as the "two-rat" phenomenon, as it refers to the migrant couples who live in urban, underground rented rooms like rats — and, yes, sometimes also with rats — while their large, rural houses are left vacant. This phenomenon begins to explain why there are some 64.5 million empty houses in China, according to economist Yi Xianrong of the Chinese Academy of Social Sciences.
Wei and Zhang estimate that the pressure to accumulate wealth for marriage is responsible for 20 percent of the growth of the Chinese economy, as men scramble to start businesses and secure high-paying jobs in order to keep up with expenses. The word fangnu is an example of their struggle. Literally translated, it means "a slave to the home" and refers not to a woman who is a slave to housework, but in most cases, to a man who must slave at his job in order to afford a house and, by extension, a wife.
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Sensing the challenges faced by Chinese men in the dating and marriage departments, 29-year-old Vincent Qi is trying to make a difference. Born in China, he went to college in Britain and speaks English like an over-caffeinated grad student. Now in Beijing, he calls himself "The Lady Whisperer" and markets himself as an online guru on how to get women. Qi also teaches online classes on confidence-building, self-improvement, and how to be an all-around better man. He has over 4,000 followers on China’s Weibo, and just three months since the online launch of his tuition-based school, he has attracted over 100 students — all male, and all rather average. They include a motley mix of students, small-online-shop owners, and working professionals on various rungs of the career ladder.
"Socially, we [Chinese men] need to be average," says Qi, stressing that "China is not a culture that values individuality." He is quick to add, however, that from a monetary perspective, it’s highly preferable to be well above average. This creates a paradox for China’s "average Zhou": how to be far enough above average to be respected, without exceeding the culturally enforced limitations of what is considered respectably above average?
One of Qi’s students, 28-year-old Rodman Xie, thinks he is close to finding the answer.
"I took the gaokao three times and still only managed to get into a very average university," he says. "By societal standards, I’ve failed at many things, but I’ve never stopped setting goals for myself, and that’s what keeps me going." He admits that though things seemed easier in the days of the almighty work unit, he wouldn’t trade that kind of stability for what he describes as "the diversity that contributes to a healthy society — the sort of diversity that we’re starting to have now."
A native of China’s northeast, or Dongbei region, Xie works in marketing at an export company in Shanghai, a city that he admits wasn’t his first choice, but where he moved for the opportunities. He describes the women there as "materialistic," but seems relatively unshaken by the doom and gloom of the gender imbalance.
He explains that in addition to a whole lot of stress, the last 30 years in China — his lifetime — have also brought a whole new realm of possibilities. "We can change cities, change careers, pursue our interests, meet people from all over the world, and sometimes even travel to foreign countries," says Xie. "And for now, that kind of average is good enough for me."