Yellow Cows and Gray Income – 黄牛和灰色收入

Greyincome.2.Credit.1421consulting.com. Consulting Group
Is Gray Income really just a “Fact of daily life in China”? Credit: 1421consulting.com

You’re late to the game, the lines for tickets are ridiculous. You’re losing hope of getting in and watching your favorite team. Until some dude in a ball cap and jeans saunters over to you and discreetly taps a bag he’s carrying and mumbles, “Tickets, man, need tickets?”

Buying from scalpers is a gamble, no doubt, but I’ll be honest, I did it with a few friends when we almost missed a game in South Korea two years ago. The seats were crappy, but we moved around and made do. Before that shady guy showed up we thought we’d lost out on chance to see the Twins playing, but it all worked out.

China has its own kind of scalpers, and just like everything else in this country full of contradictions, they take it to the extreme. Huang Niu, Yellow Cows, is the Mandarin term used to describe these folks who hang around bus and train stations. We’ve used them here from time to time, but never as a first resort.

黄牛。1.credit.soho.com
No body wants to do anything about the Yellow Cow in the room…. Credit: http://www.soho.com

Where China takes this idea and goes to the nth degree is at the banks, hospitals, and other civil service industries.

About a year ago a video on WieBo (Chinese Twitter) surfaced and brought this issue into the public forum. A young woman and her mother surrounded by patients stand in line at a hospital, and the young woman is yelling at this older lady. The older woman is one of the people who wake up early, get to the hospital and get the first tickets to see the specialist doctors. She’s not sick at all, and instead sells the ticket to the highest bidder. In the video the young woman, who is seeking treatment for her sick mother, yells at the scalper for scamming people like this. The scalper calmly replies that she does all the work. She gets up and comes early. The payment is for her work and time. Very practical, right?

Where this practicality crosses the line into illegal activity is when the hospital staff and the scalper collude on the practice. This is the part that is very hard to pin down because no one admits a thing. The specialists are the ones most want to see, but there are so many people who want to get into see them that it is pretty hard. Unless you get there early enough and are lucky enough. The other way is to know someone who can pull some strings.

That’s when these scalpers use their guanxi or connections with the workers to snare this sought-after ticket, all the while keeping it from other patients who should receive it. Totally wrong and totally illegal. But hard as hell to prove on a case by case basis.

Greyincome.1.Credit.China Medical News
It’s all about those Red Maos.  Credit: China Medical News.com

The banks are another story altogether. More complex, these particular scalpers are called Zhong Jie, intermediaries, and perform more than just getting people quick tickets. The formal sounding name is fitting as you realize how institutionalized the whole system truly is. Read: Corrupt.

These Zhong Jie are customarily middle-aged women, but there are men among their ranks. Here’s how they work and how to engage their services. And why they seem like a necessary evil in the present day China.

lost-in-bureaucratic-maze
Credit: adst.org

In China, any official civil service that a citizen may need to use is rendered into a labyrinthine obstacle course that often leaves a person sweating, tired, and at their wit’s end due to the farce that is bureaucracy here. License, renting an apartment, paying utilities, buying property, banking—doing any of that here can make even the most self-actualized individual want to run into traffic.

Generally speaking, at any official building you can run into Zhong Jies. Stand in line for a minute or so and they will approach you on their own. Look around and you’ll find them standing by doorways or in the corners of the room chatting up the security guards. They are discreet but direct. They tell you what they can do and their price. You take them up on their offer or brave the “system” on your own.

The world of bank loans is how I entered unknowingly into this cycle of institutionalized corruption. A while back, my wife took out a loan to help her folks with a new apartment. We went to the bank and outside the doors a plump fifty-something-year-old Chinese woman with two purses met us. Xiao Ming talked to her respectfully, addressing her by her sir name with the title “Jie”—sister—after. Apparently Xiao Ming had met this woman at the housing bureau office. I had no idea who this lady was, but everyone else in the bank did.

As I quickly found out, she was a Zhong Jie, our intermediary for getting the loan at the bank. In the span of an hour and a half, she cut through a dozen lines, joked with workers while handing them our documents and a bit of money discreetly tucked between forms, and all the while assured us that everything was okay. I didn’t understand much of that morning, but it was clear that our Zhong Jie had saved us hours and hours of standing in lines and the guesswork of unclear instructions that the bank seemed to give just to screw with people. I saw several people waiting in lines, only to get to the counter and be told they’d filled out the wrong paper and needed to do it all over again, and, yes, wait in line. She helped us avoid all the pitfalls. It was like watching a slight of hand act where there were so many hands to keep your eyes on that eventually I just gave up and, when our Zhong Jie declared that a loan agent would call us in a few days, I just chalked it up to magic.

Come to find out later that Zhong Jies spend all their time at banks building up guanxi with bank employees. This is pretty much their “day job.” They do favors, give money, share food, anything to ensure a working business relationship. They are not employees at any of the places for which they provide services. The Zhong Jie then directs her customers to her “friend” and takes her cut (we paid 1,000RMB for our Zhong Jie’s service), and the bank worker also takes his share. But his comes from the loan itself. You see, there are set interests rates on loans, of course. These are annoying, but legal. The loan agent takes an extra percentage from your loan as his personal payment for providing you with the loan. This amount is divided up among the individuals involved in the process, like tip sharing at a restaurant. In Xiao Ming’s case, the bank worker took out 2 percent.

This happens all the time, in many banks around China. And is completely illegal.

Inthenameofthepeople.1.Credit.SouthChinaMorningPost
You can trust us. We don’t know how to smile. Credit: China South Morning Post

A popular Chinese television show recently shed light on this issue. That’s happening a lot lately with T.V. shows. Love that directors are pushing the envelope more and more! The specific show I’m referencing is called “以人民的名义” – In the Name of the People. This is seriously one of the most popular shows in China right now, and it’s all about the government crackdown on graft. President Xi’s mission of weeding out the corrupt and upholding the “Chinese Dream” has become hot entertainment fodder. I’m sure this is just the beginning of a series of shows where greedy officials get taken down by Party-loving (that’s a capital P) detectives and watchdog citizens. Despite the heavy hand of the Communist Party all over the show, it is still pretty engaging. Relevant to this blog post is the episode where a bank manager gets busted for the exact process I just described, and she claims that it is such a widely practiced procedure that she had no idea it was even considered corruption.

How does that happen? In the case of these new Chinese shows, art is imitating life. At least the gritty, corrupt elements of it. It’s basically a mandate from the government. So then my question is how in the hell do people get so immersed in this septic mess of criminal behavior without even knowing it’s illegal?

This isn’t a new phenomenon. Back in 1978 when China began “opening up” economically, they coined a term for this sort of “off the books” income stream that emerged: Gray Income.

Teaching, tourism, the funeral, and medical industries are all areas that generate substantial “grey income.” This is not an exaggeration. Xiao Ming’s cousins just gave birth, and a few months ago while I drove with them to a hospital they got talking about how they have to give the anesthesiologist and the doctor delivering their babies hongbao to ensure they do a good job. I couldn’t believe what I heard. Questioning them, I found out that, it’s true, they felt they had to give the doctors and nurses red envelopes packed with money in order for them to DO THEIR JOBS. When I lost my cool over this news, everyone in the car just looked at me like I was a naïve child.

One of the cousins tried to give a red envelope to her doctor for a surgery, and when the surgeon turned it down it was a big deal. Turns out, the doctor just needed a favor from this cousin’s husband (who is a police officer) a short time later. Waiving the red envelope fee was her way of ensuring the favor would get done.

I used to live in an apartment where a public school teacher was a neighbor. Every weekend her place was packed with students. All day long I’d hear kids going up and down the hall to one of her weekend “classes.” Moonlighting like this is illegal, but that didn’t bother this teacher. And it doesn’t bother so many others that do the same exact illegal thing.

Some people caught in the cycle, people like those interviewed in this NPR article claim they can’t change the system, and to survive they need to play the game. This “fact of daily life in China” is alarming not because it is happening, but because EVERYONE believes it’s wrong on an ethical and moral level, but believe they can do nothing about it. So nothing changes.

There’s no doubt that people benefit from expedient service using Zhong Jies and Huang Nius. Heck, it’s downright entrepreneurial of them to use their time this way. But they’re near the bottom of the system that goes up and up. And that system is corrupt.

The people at the very bottom are the ones who need those loans, need those workers to do their damn jobs honorably.

The people at the bottom are people like me and my wife. Like you, probably.

Unless you’re a guilty bank worker in China, of course.

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