Slate has an interesting article about the multibillion dollar cigarette black market. It is centered in Yunxiao, which until very recently was just another Chinese backwater. It currently supplies almost 400 billion cigarettes a year, which are produced by 200+ cigarette factors which are creatively hidden:

“Most factories are underground,” a Yunxiao cigarette broker confided in hushed tones. “They’re under buildings, unimaginably well-hidden, with secret doors from the basements.” Even the village temple—topped with an arched red roof and twisting, frescoed spires—conceals a factory below, she said.

Cigarette companies and the Chinese government are also finding it extremely hard to root out the counterfeiters. In many ways, it echoes the stories you read about the drug war in Mexico:

Villagers wary of strangers act as sentries along Yunxiao’s narrow side streets and in its hotels, and outsiders are frequently tailed. Factory raids carried out by Chinese police have yielded semiautomatic rifles and met with machete-armed resistance. Every year, several state and private investigators are murdered in retaliation killings. Though Chinese authorities offer rewards of thousands of dollars for information, few residents dare to take them. “Even if you get the money,” one villager said, “you won’t have any life left to enjoy it in afterward.”

Link.

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The WSJ has an article over how China’s “one child” policy led to a higher rate of savings in China and may have played a part in our own financial bubble:

One possible reason for the jump in savings: The dearth of women is making China’s marriage market extremely competitive, and families with boys are accumulating wealth to make their sons more attractive matches.

In a paper recently posted to the National Bureau of Economic Research’s website, economists Shan-Jin Wei, at Columbia University’s Graduate School of Business, and Xiaobo Zhangk, at the International Food Policy offer evidence why this might be so. They find that in areas where the male-to-female sex for young Chinese is high, savings rates are higher, too.  And they find that households with sons save more in high male-to-sex ratio regions.

Link. Via.

(PS: Hello again.)

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