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  • Apr 17, 2014
  • Updated: 2:35pm
Lai See
PUBLISHED : Wednesday, 12 February, 2014, 12:46am
UPDATED : Wednesday, 12 February, 2014, 12:46am

Sex Drugs and GDP

BIO

Howard Winn has been with the South China Morning Post for two and half years after previous stints as business editor and deputy editor of The Standard, and business editor of Asia Times. His writing has also been published in the Far Eastern Economic Review, the Wall Street Journal, and the International Herald Tribune. He writes the Lai See column which focuses on the lighter side of business.
 

The crackdown on the mainland's "sin city" Dongguan has caused ripples throughout China. It's not only attracted those with a vicarious interest in these matters but has also come to the attention of the chief economist of Minsheng Securities Dr Qiu Xiaohua. He thinks events in Dongguan will be felt further afield since vice is not confined to the city. Indeed he says the sex industry on the mainland is huge, though is hard to quantify precisely. He notes that prostitution either directly or indirectly stimulates a range of industries such as hotel construction, investment, the condom industry, hotel accommodation, catering, venue rental, cosmetic sales, tourism, transport and so on.

Xiaohua says there have been a number of studies that suggest the sex industry accounts for 1 per cent of Dongguan's gross domestic product, or 50 billion yuan. It is possible, he thinks, that the figure for the whole of the mainland could be around one trillion yuan. However all this is far from certain because, as he notes, there are a high number of "invisibles" when it comes to assessing sex industry statistics. But he draws a parallel with the crackdown on "luxury" spending, gifting and banqueting by Communist Party officials last year, which had a significant impact on retail sales.

China is not alone in having a thriving sex industry. We recall that back in 2006 when Greece was groping for a way to preserve its fiscal modesty, it hit on the wheeze of including the value of its underground economy, which apparently boosted its GDP by 25 per cent. This was to avoid the wrath of the EU, which had the right to impose hefty fines on countries whose budget deficits exceeded three per cent of GDP. Greece was able to boost its GDP by €60 billion, which included estimates for the value of prostitution, cigarette and alcohol smuggling, and money laundering. Once the global financial crisis hit and austerity measures began to bite, Greece's prostitutes again came to the rescue. An amateur football club reportedly turned to a local bordello for financial support. As a result the team wore pink practice tops bearing the logo Villa Erotica.

However, it transpires that the EU has had rules since 1996 requiring information on the black economy but only a few countries complied. But last year the European Parliament and European Commission passed a new regulation, which comes into force this August, requiring countries to comply with these rules. This is to ensure consistent economic comparisons between member states and a fair distribution of the EU's €144 billion EU budget. For this reason Britain's national statistics office recently announced that drug dealing and prostitution contributed £10 billion to its GDP. Prostitution accounted for £3 billion (30 billion yuan) for a population of 63 million, which is some way below the 50 billion yuan that is supposedly generated by Dongguan's population of 6.4 million.

 

Reynolds joins Blackrock

We see that CLSA's former chief operating officer, Andrew Reynolds, is to join Blackrock in Hong Kong as chief financial officer and head of corporate strategy for the APAC region later this month. The website Pensions & Investments quotes Mark McCombe, who said the position is new and combines "running the treasury" with "the execution of strategy." Reynolds left CLSA a year ago having spent more than 10 years with the company.

 

30,000 sign to save parks

There are three days left to object to the government's plans for small house development in Hoi Ha, Pak Lap, So Lo Pun, Pak Tam Au, To Kwa Peng and Tin Fu Tsai.

Save Our Parks, a coalition of more than 30 green groups, has set up a website on which it details its objections and proposals www.countryparks.hk in a letter to be sent to the chief executive Leung Chun-ying and other senior government officials.

So far more than 30,000 concerned citizens have signed the letter, and the organisers are urging everyone who wants to see the country parks protected from development to sign up by Friday. The letter notes that when the country parks were initially set up, some remote villages and farmlands were excluded. But it stresses that following incidents such as illegal development at Tai Long Sai Wan in 2010, it is clear that better protection of the parks is needed against development in these enclaves.

 

Have you got any stories that Lai See should know about? E-mail them to howard.winn@scmp.com

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Giwaffe
Legalization would go a long ways towards protecting the sex workers of society. Without the protection of the law, they are even more exploited and more taken advantage of then they would otherwise be. For workers in the sex industry, it is probably quite similar to Dickensian England where might makes right and without little hope of escape or redress.

Like the workers in the other "3Ds", sex workers should enjoy the full protection of the law when they try to make their livelihood and support themselves instead of relying on handouts from the state. They should be admired for their courage instead of stigmatized because certain people don't like it and try to impose it on everyone else.

Hopefully, Hong Kong and China will expeditiously decriminalize and regulate the sex industry, thereby providing protection and safety for both workers and customers alike.
DinGao
The has been and always will be a sex industry and while it remains illegal, the profits go to triads and organised crime and the girls are the victims of traf**** and suffer ill health, poverty and prosecution.
Millions of dollars are spent enforcing the law which could be better spent on good causes.
It is presumably socialist doctrine and religion which prevents a sensible approach to the situation in the PRC and it's SARs..
DinGao
Why censor t r a f f i c k i n g ?

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