Cash cards

On a recent visit to my sister in China, she surprised me by producing an envelope full of cash cards.

The concept of the cash card was not new to me. It was introduced during the 1990s when companies would hand them out to their staff, or those in positions of power, in the form of 'coupons'. Since they were disguised as consumables in the companies’ accounts and never registered officially, the amounts accumulated by their receivers would never show up in their personal income. The practice was ubiquitous: the loss of government tax revenue was such that there was a time when it was banned. To no one’s real surprise, however, it made a quick comeback. The reasons? The cash card – with a validity of only six to twelve months – was a convenient and huge source of revenue for major department stores, most of which were then state-run. More crucially, those who benefited tended to be public sector workers: in return for their services they were receiving coupons either from businesses or individuals who needed help. In effect, public money was being transformed into undetectable private income – ‘grey’ income which formed a large part of these workers’ personal wealth.

What astonished me when I saw the envelope in my sister’s hand was not only that the plain coupons of the old days had evolved into something with the sophisticated look of a credit card, suggesting that its use has been thriving, but the amount that the cards were worth. Having been away from home for over a decade, I asked what now seems a rather stupid question: ‘How come your company did not simply put the money into your salary so that it could be spent whenever and wherever it was needed?’

Delivered in a low voice (even though we were on our own at home), the answer sounded faintly familiar: they were presented as 'festive greetings' – in plain words, a sort of 'bonus' on special occasions which was not accounted for. In this instance, the cash cards were purchased in the name of 'stationery'. Since the amount of stationery which is consumed in a company is unlikely to be tracked down, its real cost becomes an easy target for manipulation, resulting in a much lower payment of tax for all concerned.

Given that no eyebrows were raised when the cards were presented to the cashier, their popularity is obvious.

The irony here is that the company my sister works for is a newspaper which is famous, both at home and abroad, for its candid exposure of financial corruption and other social problems. The dazzling new wealth of China is well known, but not all of it is honestly created, and there are tensions between the old communism and the new capitalism that force even ordinarily respectable people into dubious practices.