On the day of his high school graduation in 1979, Zhu Zhuanghong saw a bright future for himself. People’s Bank of China had just picked the 19-year-old from among hundreds at his school to start work as a prestigious “cadre” candidate – an employee, in the Leninist language of Chinese institutions, set for a career as a professional. “My teacher told me that as a cadre at the bank, the wind cannot blow you over and the rain cannot hit you,” Mr Zhu recalls.
He was wrong. Now 50, Mr Zhu has been buffeted by the wind and rain for more than a decade. In 1995, he lost his job at Industrial and Commercial Bank of China , the world’s largest bank by market capitalisation, which had been spun off in 1984 from the central bank that had given him his first job.
The reason for this dramatic decline in fortunes is hidden in a manila folder in an office drawer somewhere in Beijing: Mr Zhu’s renshi danganor “employee file”. While China has long since replaced its communist economy with a kind of raw capitalism and is fast ascending to the rank of superpower, its relationship with its own citizens remains partly stuck in its totalitarian past. The state continues to keep a secret dossier on every working citizen, which helps it retain its absolute power over the individual.
The fate that Mr Zhu and an estimated hundreds of thousands of others – although there are no reliable records on exactly how many – have suffered under this system serves as a reminder of the limits of Beijing’s market reforms.
According to Mr Zhu, back in 1994 – following an argument with his supervisor at ICBC – crucial documentation proving his cadre status, higher than that of his “worker” colleagues, disappeared from his employee file, making him unemployable for other institutions and stripping him of part of the pension benefits he had earned.
After suing ICBC without result, Mr Zhu is now going after its shareholders in a Kafka-esque fight to uncover the truth about his own past and salvage what remains of his future.
For each of China’s 700m employees – except farmers, historically excluded – there is a file, started while they are high school students. The file is transferred to their employers, where it is open to superiors but closed to the employees themselves – which means, in effect, the state’s invisible hand can make or break anyone’s fate.
“The file system holds some functions that are covered by the social security number in the United States, but its real meaning is that it gives the state an instrument of control over the individual,” says Chen Tan, a professor of public policy at Central South university in Changsha.
The file is a leftover from before the market reforms that began 30 years ago, when all employers were state-owned “units”, and every individual was tied to one. The unit was in charge of every area of its employees’ lives – including cradle-to-grave care, political thinking and even marriages and births. The state no longer rules all aspects of life but the file system maintains power over individuals in case it is needed. That also leaves the door open to abuse.
Employee files are frequently filled with false information, and often used by superiors to punish staff they do not like or by state institutions to stop individuals taking politically sensitive ac tion, says Prof Chen, who has had access to thousands of such files for his research on the system.
Li Subin, a lawyer from Henan province, faced such abuse. In 2005, he moved to the capital and started work for Yitong, a law firm. But the Henan government refused to transfer his file to Beijing after a dispute between Mr Li and the authorities – whereupon the municipal government argued it could not renew his licence. Beijing authorities closed Yitong for six months, saying it was illegally employing Mr Li. Yitong was already a thorn in the government’s side as it had taken on politically sensitive cases.
Mr Li turned to courts in both Henan and Beijing, but neither solved his problem. In Henan, where he sued the local justice department, judges told him the file transfer was a problem with the Beijing justice department and refused to become involved. In Beijing, where he tried to drag both departments into court, his complaint was rejected. “All that is only possible because the file system exists,” complains Mr Li. “It makes us hostages, it restricts us as if we were slaves chained to the land.”
But files are not only abused as instruments in power struggles or vendettas. They can also become a commercial good, highlighting the problems of a society where everything can be for sale. Several graduates in the central town of Wubu in 2006 have discovered in the past three years that their files have disappeared, erasing bright prospects and condemning them to a future as day labourers or freelance salespeople.
The vanished files all belonged to students with exceptional grades, raising suspicions of identity theft. Officials in other provinces have been found to have sold files to wealthy families whose offspring wanted to improve their career chances. The common feature in such cases is that the victim is usually the last to find out there is a problem and frequently fails to discover what happened.
For Mr Zhu, everything went fine for the first 15 years at People’s Bank of China. The year 1979 was a hopeful one for China, and the 1980s were even better. The country was finally leaving the nightmare of the cultural revolution behind and initiating experiments in market economy.
Mr Zhu rose rapidly through the ranks. First he worked in gold and silver appraisal, and was made head of the Communist party youth league in that department. He began writing on finance in state media and, by 1991, he was working in ICBC headquarters in Beijing. In the course of this ascent, he says, he found himself in trouble with more than one supervisor over his ambitions. Following clashes with a boss whose authority he challenged, he says, he was told in 1994 seek a new employer. After two years of fighting to stay, he began writing for a state magazine. Five years in, he was fired from this position too.
His search for a new post took him to China International Intellectech Corporation, a state-owned human resources company. This is where the skies fell down on him. “They told me that even the documentation of how I entered the bank in 1979 wasn’t there [in my file],” says Mr Zhu. “I felt like my brain was imploding. Forget about the cadre status – without the proper documents, I was nothing, not even a worker. I would have no social security, my past 22-year working life would be erased.”
Mr Zhu convinced an official at ICBC to issue a note confirming the relevant material was lost and, on that basis, CIIC took him on – with the proviso that he must pay his own social security contributions because, according to CIIC, he lacked clear status as either a cadre or a worker.
In 2007, when he left CIIC, his file was transferred to the state human resources agency. When the agency found the note from the ICBC official, Mr Zhu was told it was not valid and he would have to find the original document proving when and how he entered the bank almost 30 years ago. He found a copy at the local archives office but it carried a stamp marking him as a “worker” – entitling him to lower social security benefits and making him ineligible for jobs he would want. Forms recording his cadre status, which he recalled filling in, were missing as well.
Mr Zhu has concluded that someone must be held responsible for the fact that he lost part of his pension. In February, he took ICBC to court, asking it to restore his cadre status and reimburse him for his Rmb22,133.61 ($3,000, £2,000, €2,300) in social security contributions. He lost, appealed and lost again. ICBC does not contest that items might be missing from his file but argues that it is not responsible because his employment at the bank ended 15 years ago. In court, its representatives said Mr Zhu should go after his other employers.
Next he petitioned all state departments that could possibly be responsible, all the way up to the state council’s legal department – to no avail. “Now all that’s left to do is go after ICBC’s shareholders,” he says. Last month Mr Zhu, who now survives by writing and broadcasting on finance, wrote to investors, including the ministry of finance and Goldman Sachs, but received no answer. The legal system, he believes, offers one more avenue: arbitration. His quest has made him a nervous wreck and this final step is unlikely to yield success.
Without full access to his own file, he still cannot prove what exactly brought his life crashing down around him, let alone where and when – which shows why the system is in dire need of reform, experts say. “The main problem is the secrecy,” says Prof Chen. But he is not optimistic that Beijing will allow more transparency any time soon. “There is just too much vested interest involved and there is the sense that the state must not cede this last key instrument of control over its people.”
