Tea Leaf Nation

China's 'Hormone Economy': Monetizing Male Loneliness

Online hostesses are making hundreds of thousands of dollars in hard cash as men buy virtual Ferraris, flowers, and even titles of nobility to impress them.

HONG KONG — For some young Chinese, it's living the dream: make $300,000 in two years, work 10 hours a week, and win thousands of adoring fans, all without leaving the comfort of home. These may sound like the outlandish promises of an email scam, but a group of young women in China seem able to pull it off, at least for now, thanks to the country's growing "hormone economy."

The term joins "hormone industries" as turns of phrase that now frequently appear in China's domestic media. Hormone industries encompass a large number of businesses that cater to young Chinese men -- including social networking, anime and gaming, e-books, and videos -- often involving some element of sex, be it overt or subtle. Due to a traditional cultural preference for baby boys and three decades of strict family-planning policies often limiting couples to one child, China has approximately 40 million to 50 million single men and a highly skewed gender ratio among its younger population. It is perhaps not surprising that many sexually frustrated young men would take their hormone-charged impulses, and hard-earned renminbi, into cyberspace.

Enter YY.com, a self-described "rich communication social platform," and its hostesses. YY was founded in the southern metropolis of Guangzhou in April 2005, had 700 million registered users at the end of 2013, and is now a Nasdaq-listed company with a market capitalization of $4.8 billion. Among other services, the platform provides virtual rooms that allow users to connect to each other, a significant number of which are used by young women to host live or recorded singing sessions with little more than a microphone and a webcam. While most singing sessions attract a few hundred viewers or less, some can become virtual live concerts with hundreds of thousands of viewers. A recent visit to the YY homepage (pictured in part above) primarily shows dozens of images of young women in heavy makeup sitting by microphones in what appear to be bedrooms and home offices. The top trending search term on the site is for "beautiful women”-- though according to YY management, more than half of the site’s top ten performers are “very often” male.

On Aug. 8, one user who calls herself Nameni and claims to be a 23-year old young woman living in a small city in China, wrote on chat forum Tianya with a detailed account of her exploits as a singer on YY. In the widely read post, Nameni wrote that her virtual concerts are attended by more than 10,000 users on average, and when users send her virtual gifts or buy premium positions -- the equivalent of box seats in her concert hall -- she takes a one-third cut of whatever they spend. (YY management told Foreign Policy via email that "performers get close to [a] 30 percent cut.") Nameni sees the gift-buying in real time on her screen and responds by sweet-talking those users who lavish gifts on her.

"Some people think it's easy money because I just sing, act cute, and call the high-rollers 'honey' or 'hubby,' but in fact it's hard work," Nameni confessed in her post. "For hours I cannot stop singing or allow the mood to dampen. I keep talking, singing, smiling, and keeping my back straight. After each live session, I can hardly move."

Nameni wrote that she makes money by stroking the egos of male users who want to receive special winks and coos from a pretty young woman by splurging on virtual diamond rings and other gifts when thousands of other users also clamor for her attention. Nameni claimed to write encouraging words to online benefactors like: "Hubby, you are giving me gifts again. I want to have your baby." She maintains she has never had a real-life relationship with any of her fans -- not even one who spent over $120,000 on gifts for her -- but she claims to know other hostesses who have dated fans or prostituted themselves to high rollers.

Nameni's post rings true. According to YY management, the most popular performers on the platform can make up to $162,000 per month, though performers' median monthly intake falls somewhere between $162 and $325.* A July 2014 article in Southern Metropolis Daily, a state-owned but generally liberal Chinese newspaper, carried interviews with other hostesses who related experiences similar to Nameni's. One young woman made about $400 a month as a nurse before she became a popular YY hostess with enough cash to buy a Prada bag and stay at five-star hotels. The article describes how audience members with the most to spend -- known as "kings" -- buy virtual Ferraris and Lamborghinis to "park" in the hostesses' singing rooms. The slightly less wealthy have to settle for titles like "duke" and "earl," but having "nobility" allows their user handles to appear in a different section of the virtual room, separate from the riffraff who can only afford cheap virtual roses or teddy bears.

It may sound like a raucous virtual party, but anything most certainly does not go on YY. The platform's website lists over 20 bylaws, including rules against cross-dressing, obvious sexual innuendo, performing on beds, or wearing bikinis or low-cut dresses. YY management told FP it employs a team of "more than a hundred administrators" who "monitor and scrutinize video content," even giving cash rewards to users who report inappropriate content. Nameni's post claims her account was frozen twice for violating regulations on sexual innuendo, and she had to pay about $300 each time to get her account back. Meanwhile, engaging sensitive political topics, according to YY's bylaws, can result in a permanent ban. YY management said it remains in "close touch and dialogue with government" and conveys to authorities the company's "relentless effort to crack down" on "undesirable content."

YY's operators are no doubt aware that their site walks a very fine line. Since early 2014, the Chinese government has intensified its crackdown on pornographic content online in an effort to "cleanse the Internet." The making and dissemination of pornography through the Internet is a criminal offense in China. One highly popular video-sharing site, QVOD, was slapped with a $42 million fine in May 2014, and its founder was arrested in August for allowing a large number of pornographic videos on its server. In May 2014, Sina, one of China's largest web portals, was also fined and stripped of some of its online publication licenses for "spreading pornography."

According to YY's earnings release, more than 61 percent of its $135.6 million in revenue in the second quarter of 2014 came from "online music and entertainment," the sort of business described in Nameni's post, and the rest mostly from online gaming. YY is one of the luckier companies; Momo, a Chinese mobile app known for connecting its 120 million users for casual hookups, may never be able to launch its planned $2 billion initial public offering in the United States because of the anti-pornography crackdown.

To be sure, there's nothing uniquely Chinese about the desire to ogle online. A source quoted in a September 2011 article on Forbes's website named LiveJasmin, a webcam site for pornography that was created by a Hungarian entrepreneur, "the most popular adult site on the Web by a huge margin." YY and similar video sites like 9158.com and 6.cn are merely taking advantage of the same phenomenon in China, while managing to stay roughly within government-set boundaries. YY says it has so far eluded regulatory scrutiny; but since the line between what is considered undesirable online content and what is not is fuzzy and moves often, YY and its peers likely cannot rest easy.

China's hormone economy will continue to rage as the country's single young men seek online what they sometimes lack in the real world: young women, social approval, and self-esteem. As for Nameni, she finds her own conduct on YY "disgusting" and says she plans to quit at the peak of her popularity. After all, if her post is to believed, she has made over $300,000 on YY already, allowing her to make a down payment on an apartment. "Popularity never lasts," wrote Nameni. Her kind of fame lasts "maybe two, three years," she reckoned. "But no longer."

*Correction, Aug. 25, 2014: The median monthly intake for YY performers is between $162 and $325. Because of incorrect information earlier given to FP by YY, an earlier version of this article stated that this was the mean monthly intake. (Return to reading.)

Photo: YY.com/Fair Use

Tea Leaf Nation

Hong Kong's Inconvenient Truth

Some desire political independence, but the city looks to the mainland for most of its resources.

HONG KONG — Around Hong Kong, the former British colony now subject to Chinese sovereignty, the central government in Beijing is widely, though none-too-fondly, called "Grandpa." Implicit in this moniker is what Siu-keung Cheung, a sociologist at Shue Yan University in Hong Kong, characterized in an interview with Foreign Policy as the "control of bodies and lives" -- through which Beijing presents itself as the generous benefactor to compatriots in Hong Kong.

Even as the grassroots campaign in Hong Kong to wrest greater autonomy and other freedoms under Beijing's one-country, two-systems constitutional framework has intensified, the city's long-standing dependence on the mainland for basic necessities like water, food, and energy rarely gets a mention. But if Hong Kong has anything to learn from its colonial ruler's experience in negotiating with Beijing, it's that the cold, hard realities of resource dependency can translate into political concessions.

Although not quite a piece of "barren rock" as derided by Lord Palmerston, Britain's foreign secretary during the First Opium War, from 1839 to 1842, the fact remains that Hong Kong isn't endowed with the necessary natural resources to support its population of 7 million. The Hong Kong special administrative region of China gets over 70 percent of its water from Dongjiang, a river in neighboring Guangdong province. Meanwhile, over 90 percent of fresh meat and vegetables consumed in Hong Kong is sourced from the mainland. And mainland energy sources generate more than half of the electricity consumed locally.

Many Hong Kongers in the staunchly capitalistic city tend to regard the supplies as mere business transactions with an equally capitalistic state, not least because the city pays market prices. Most people have also taken it for granted that water will keep flowing and live pigs will keep being trucked in from across the border. But decades before the reversion to Chinese sovereignty in 1997, the political ramifications of Hong Kong's resource dependency loomed large in the minds of British colonial officials. And as the tug of war between Hong Kong and the mainland over universal suffrage intensifies, these issues may come to hold greater sway in the public consciousness.

When British colonial officials exercised control over Hong Kong, they were deeply preoccupied with Hong Kong's use of mainland water. After China's civil war ended with the Communist victory in 1949, hundreds of thousands of refugees poured into the tiny territory and strained its scarce water resources. Rationing became a fact of life. In 1960, Guangdong provincial officials and the colonial government struck a deal allowing Hong Kong to pipe in water from a reservoir recently completed in Shenzhen, now a megacity of over 10 million but then a sleepy part of a rural county. Beijing offered the water for free, but Hong Kong's colonial government rejected the overture because it saw Beijing's offer as a political ploy, and it insisted instead on a strictly commercial transaction. The Chinese agreed and in return earned badly needed foreign currency and, later, funding for treatment infrastructure. This laid the groundwork -- both hydrological and geopolitical -- to draw the colony closer to the mainland.

A few years into the 1960 supply agreement, a severe drought limited water rationing to four hours every four days. Since then, continued population growth and climate change have made Chinese water even harder to reject. According to Hong Kong government figures, in 2012, Hong Kong depended on the mainland for 76 percent of its water supply, up from 22 percent in 1965.

During the Sino-British negotiations over Hong Kong's sovereignty, which began in 1982, water supply ranked high on the list of concerns. (Dependence on water from the mainland was 34 percent in 1980.) Percy Cradock, then the British ambassador to China and who was involved in the negotiations, warned Prime Minister Margaret Thatcher that the British had little bargaining power because Hong Kong so heavily relied on the mainland for fresh water. The British eventually made significant concessions and gave up all of their rights to Hong Kong.

The fact that water might have sealed the city's fate on the negotiating table seems like ancient history in post-handover Hong Kong. But it has not been forgotten; in August 2010, Nelson K. Lee, a lecturer in government and public administration at the Chinese University of Hong Kong, published the results of archival research and argued that the British had given up pursuing water independence for Hong Kong as a part of the handover negotiations, while China had intentionally increased the quantity of water supplied to Hong Kong in order to tighten the mainland's leash on the territory. "This certainly captured the attention of the pro-[Hong Kong] independence movement," Lee told FP. Lee said that was true "even for ordinary Hong Kongers," making the general public "more attuned to the politics behind what used to be formulaic economic calculations."

This shift is evident in the recent backlash against the Hong Kong government's proposal in early 2014 to tap more electricity from the China Southern Power Grid in Guangzhou. The proposal, if implemented, will result in Hong Kong relying on the mainland for more than 90 percent of its energy needs. A chorus of opposing voices, ranging from environmental groups to the local electric utilities duopoly, roared when public consultation completed in mid-June.

As it is, Hong Kong already relies on the mainland for about half of its electricity. Natural gas piped in from a gas field on the Chinese island of Hainan provides about a quarter of the electricity supply for Hong Kong, about another quarter comes from Daya Bay Nuclear Power Station in Shenzhen, and the rest comes from coal imported from elsewhere, including from the mainland. When the Daya Bay plant was being planned in the mid-1980s, Hong Kongers took to the streets to protest, with many citing the meltdown of a nuclear reactor in the then-Soviet city of Chernobyl in April 1986 as a dangerous precedent. But in the end, the energy-hungry city became one of the plant's largest customers. There's one source of dependency that is already nearly absolute: fresh meat and produce. According to Hong Kong government figures, Hong Kong gets all of its fresh beef, 94 percent of its fresh pork, and 92 percent of its fresh vegetables from the mainland. 

To be sure, Beijing has not threatened to pull the plug on water, food, and electricity for Hong Kong -- that would not be politically astute. "At the end of the day, the party is all about paternalistic politics, but it can't use water and food as bargaining chips. The cost of using them as such is simply too high," said Cheung. "Because once the trigger is pulled, it'll backfire." 

Photo by Alex Ogle/AFP/Getty Images