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China: Tobacco Grips the Smokers' Republic

by Jonathan WattsGuardian (London)
December 4th, 2003

Given the thick palls of smoke in many of Beijing's restaurants and bars, it is not easy to believe that the winds of change are now blowing through the tobacco industry in China. But the government insists that the nation, which makes and consumes more cigarettes than any other in the world, is about to get tough on advertising, health warnings and juvenile smoking.

After signing the United Nations Framework Convention on Tobacco Control last month, China is obliged to tighten restrictions on cigarette marketing and consumption so that more priority is placed on countering the health risks rather than emphasising the tax revenues.

But faced with immense cultural and financial resistance to change, the health ministry faces an uphill battle in putting into practice the policies it signed up to in New York.

More than a quarter of China's 1.2 billion population are smokers.

Among adult men, where the rate is about 65%, it is almost a social necessity. Offering a cigarette is a common part of any greeting between males.

Women never used to smoke at all, particularly during the cultural revolution when puffing was considered the unwholesome habit of morally degenerate western females. Now, however, it is becoming more acceptable. Smoking rates among women have risen from 1% a decade ago to 5% today.

Compared to the rest of the world, regulations and public attitudes are far more sympathetic to smoking. With taxation relatively low, the prices of domestically produced cigarettes are cheap, at just eight pence per packet. There are also fewer disincentives. Packets do carry health warnings, but they are vaguely worded and printed in relatively small characters on the sides rather than the front.

In these conditions, the number of smokers is growing at the rate of 3 million per year. Coming amid an economic boom that is pushing up wages and prices, this is attracting a throng of foreign tobacco industry giants who see China as their best hope to light up new markets while others are being extinguished around the world.

The government's position on smoking has traditionally been supportive. As the owner of the state monopoly which supplies most of the 1.7 trillion cigarettes consumed in China each year, it can hardly afford to be anything else. Add to this the 65% tariffs slapped on increasingly popular imported brands and the government's tobacco income is worth about a 10th of its entire revenue.

But there is a growing realisation that money is not everything - or at least that the short-term financial boost from cigarette sales can be all but wiped out by the long-term health costs to the nation.

The World Health Organisation estimates that 700,000 Chinese people die every year from smoking. The number is rising fast. Lung cancer fatalities have increased from 30,000 in 1975 to 250,000 this year.

Attempts have been made to reduce tobacco consumption. Although there is no national law on juvenile smoking, most municipal governments have introduced ordinances banning sales of cigarettes to minors. Many parts of the country have imposed advertising restrictions, though tobacco firms have found ingenious ways to circumvent the rules.

Last year, China's national football team trained for the World Cup at a facility in Yunnan that is run by and named after Hong Ta, the country's largest tobacco company. The firm also sponsored David Beckham and the rest of the Real Madrid team when the toured China this summer. After its ads were banned on state television, the Ningbo Cigarette Factory raised the profile of its Dahongying brand by sponsoring school libraries. Shanghai expects to fund its first F1 race next year largely with tobacco revenues.

The UN convention may well put a stop to such practices, but only if it is backed by laws at the next People's Congress. Given the power of the tobacco industry and the inability of the government to enforce rules, it is hard not to be sceptical about the outcome.

Among China's hundred biggest taxpaying companies, 35 are state-run cigarette manufacturers. Many of these firms are major investors in television and radio stations. They are also major employers, providing jobs to 6 million farmers, 3 million retailers and 500,000 factory workers.

The government insists that Sars has taught it the lesson that shortcuts in healthcare can have damage the economy in the long-term, but it has yet to put its money where its mouth is. Although the state earns 67bn RMB (5bn) from tobacco taxes, it spends less than 150,000 on educating the public about the risks of smoking.





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